Preamble

The House met at half-past Two o 'clock

PRAYERS

[MADAM SPEAKER in the Chair]

WAYS AND MEANS

SESSIONAL RETURNS

Ordered,

Returns for Session 1994–95 of—

(1) Business of the House;
(2) Closure of Debate and Allocation of Time;
(3) Private Bills and Private Business;
(4) Public Bills;
(5) Sittings of the House;
(6) Special Procedure Orders;
(7) Standing Committees; and
(8) Select Committees in the same terms as the Orders made on 14th December 1994; and
(9) Delegated Legislation and Deregulation Proposals, &c., showing:—


(A) the numbers of instruments subject to the different forms of parliamentary procedure and those for which no parliamentary procedure is prescribed by statute (1) laid before the House; and (2) considered by the Joint Committee and Select Committee on Statutory Instruments respectively pursuant to their orders of reference, setting out the grounds on which Instruments may be drawn to the special attention of the House under Standing Order No. 124 (Statutory Instruments (Joint Committee)) and specifying the number of Instruments so reported under each of these grounds;
(B) the numbers of Statutory Instruments and other documents ordered to be treated as Statutory Instruments, other than draft deregulation orders, considered by the House and by Standing Committees on Statutory Instruments, &c, respectively, showing—

(i) with respect to those considered by the House, the number considered before 10th January 1995, indicating the numbers subject to affirmative and negative procedure; the number which did not stand referred to Standing Committees under the Sessional Order [19th December 1994], and the number considered after 10th January 1995 to which the Sessional Order did not apply; and
(ii) with respect to those considered by Standing Committees on Statutory Instruments, &c., the number referred to Standing Committees before 10th January 1995, indicating the numbers subject to affirmative and negative procedure; the number which stood referred to Standing Committees under the Sessional Order [19th December], and the number referred to Standing Committees after 10th January 1995 to which the Sessional Order did not apply; 
(C) the number of Statutory Instruments and other documents ordered to be treated as Statutory Instruments approved &c. by the House, indicating the number upon which the Question for approval was put forthwith, pursuant to Standing Order No. 101 (Standing committees on Statutory Instruments, &c.); and the number of Instruments and other documents reported by Standing Committees on Statutory Instruments, &c., indicating the number upon which no subsequent proceedings took place; and
(D) the number of deregulation proposals and draft orders, showing for deregulation proposals the number in respect of which the Deregulation Committee recommended that a draft order in the same terms should be laid before the House, that the proposals should be amended, and that the order-making power should not be 239912 N

used, respectively; and for draft orders the number in respect of which the Deregulation Committee recommended that the draft order should be approved, and whether or not the recommendation was agreed upon Division, and those which the Committee recommended should not be approved, respectively, and in each case, the decision of the House.—[The First Deputy Chairman of Ways and Means]

Oral Answers to Questions — TREASURY

Small Businesses

Mr. Duncan Smith: To ask the Chancellor of the Exchequer what priority he gives to start-ups of small businesses as an economic indicator. [690]

The Economic Secretary to the Treasury (Mrs. Angela Knight): The major banks estimate that business starts are running at around 400,000 a year. Start-up figures are one of a number of important economic indicators.

Mr. Duncan Smith: I am grateful to my hon. Friend for those statistics. Does she agree that a key factor in encouraging business start-ups is a benign tax structure which lowers the burden on businesses in their initial stages? Will my hon. Friend and her Department examine the issue of the three-year point at which a number of companies find it difficult to continue in business? Does she agree that regulation—the sort of thing that would be imposed via the social chapter and the minimum wage—is the wrong way to go?

Mrs. Knight: My hon. Friend makes an excellent point. I assure him that we are doing what we can to support small businesses through proposals such as venture capital trusts, the loan guarantee scheme and the enterprise investment scheme. We shall continue to oppose the social chapter and the minimum working wage as we want businesses to survive and not die as would occur under Labour's proposals.

Ms Primarolo: Does not the Minister recognise that she must also take account of the companies that are not succeeding? Is she aware of the staggering increase in the number of company failures in the past two quarters? Does she realise that that is linked to the extra income tax burden of 7p in the pound imposed by her Government as a result of their economic failure?

Mrs. Knight: The hon. Lady had better look at her figures again. [Interruption.] Wait for it. It is estimated that the survival rate of businesses is improving and not worsening, as the hon. Lady implied in her question. I assure her that the best way to ensure the survival of businesses and industry in this country is to have low taxation, low inflation and interest rates as low as possible. We have that at the moment and the situation is much better than it was when the Labour party was in power.

Mr. Riddick: Does my hon. Friend agree that consumer confidence is an important factor in the success of small businesses? Does she also agree that there is a very strong economic case for reducing taxation next


week by between £5 billion and £10 billion so as to give a boost to consumer confidence and to the moral case for allowing people to keep more of the money that they earn?

Mrs. Knight: I thank my hon. Friend for his Budget representation; he must wait until next week for any further comment. However, I assure him that the survival and well-being of businesses is a very high priority for the Government. We have pledged to assist business by ensuring that the economy continues to grow and that interest rates and inflation remain as low as possible.

Betting Industry

Mr. William O'Brien: To ask the Chancellor of the Exchequer when he last met representatives of the bookmakers and betting industry to discuss relative problems in the industry; and if he will make a statement. [691]

The Paymaster General (Mr. David Heathcoat-Amory): I have met representatives of the British Horseracing Board, the Horserace Betting Levy Board, the Bookmakers' committee, the British Greyhound Racing Board, the British Betting Office Association and the Betting Office Licensees Association over the past few weeks. I have listened to their concerns and I shall take their representations into account in advising my right hon. and learned Friend The Chancellor of the Exchequer.

Mr. O'Brien: Has the Minister seen the report published by the Henley centre advising on the impact of the national lottery on the off-course betting industry? Many of my constituents who work in the betting industry are fearful of their jobs as there is no longer a level playing field. Almost 20,000 jobs could be lost because of the impact of the national lottery, while Camelot's after-tax profit is now £1 million per week. When will the Minister do something to protect jobs in the betting industry?

Mr. Heathcoat-Amory: Yes, I read that report and I am aware of the industry's view of the effect of the national lottery in particular on turnover, profitability and employment in the betting and horseracing industry. Those points will be taken into account, together with other considerations, by my right hon. and learned Friend on Tuesday.

Mr. Spring: May I thank my hon. Friend and the Treasury for the substantial help that has been given to the horseracing industry and to employment creation in the past few years, representing as I do Newmarket, the world headquarters of horseracing? However, bearing in mind the severe impact of the national lottery on the betting industry, will he consider liberalising the regime for betting shops when he has discussions with my right hon. Friend the Secretary of State for National Heritage?

Mr. Heathcoat-Amory: My hon. Friend had an Adjournment debate on the subject earlier this month. I passed on his concerns about duty rates and the point that he has just mentioned about the need, as he sees it, for further deregulation and liberalisation of betting and particularly the request by the bookmaking industry to be able to accept bets on the national lottery. I shall ensure that those points are relayed to my right hon. Friend the Secretary of State for National Heritage.

Gardening Leave

Mr. Cousins: To ask the Chancellor of the Exchequer if he proposes to end his practice of offering gardening leave to the staff of the Treasury. [693]

Mrs. Angela Knight: It remains the Treasury's policy to provide opportunities for temporary work for staff between postings wherever possible to avoid the need for what is colloquially referred to as gardening leave.

Mr. Cousins: Do the Government accept that it cannot be right to tell employees in Britain that their security and rights at work must be subjected to the full rigour of market forces while, at the same time, giving senior staff at the Treasury the extraordinary perk of a right to take up to six weeks a year on top of all other holiday entitlements to dig their gardens?

Mrs. Knight: I recognise why the hon. Gentleman is interested in the subject: he lists composting as one of his interests in "Dod". I assure him that at the moment only eight out of more than 1,000 Treasury staff are on gardening leave. We are certainly doing our best to review our policies whenever possible to use people better.

Mr. Matthew Banks: Never mind gardening leave for senior Treasury officials, does my hon. Friend agree that if the Labour party ever form a Government, the whole country will be on gardening leave?

Mrs. Knight: My hon. Friend has put his spade in it much better than anyone else so far in the debate.

Balance of Trade

Mr. Barry Jones: To ask the Chancellor of the Exchequer if he will make a statement on the balance of trade. [694]

The Chief Secretary to the Treasury (Mr. William Waldegrave): The balance of visible trade in the first half of 1995 was a deficit of £5.1 billion: lower than the deficits recorded in either half of 1994, and as low a deficit as at any time since the first half of 1987. Of course, invisible receipts now account for more than half the United Kingdom's overseas earnings.

Mr. Jones: Would not the best boost for Britain's balance of trade be a general election?

Mr. Waldegrave: No. As a great campaigner on behalf of his constituents in the steel industry, for example, the hon. Gentleman will know that since 1983 we have had surpluses in our iron and steel exports every single year thanks to the work of his constituents and our reorganisation of the iron and steel industry.

Mr. Clifton-Brown: Does my right hon. Friend agree that our visible trade figures with the far east are impressive and demonstrate the growth of our trade with those countries? Will he also consider other emerging markets such as Russia and its former republics and the fact that Korea is the second largest exporter to Azerbaijan? Will he redouble our efforts to export into those emerging markets, otherwise they will be taken by the far east and Pacific rim countries?

Mr. Waldegrave: My hon. Friend refers to the good performance of our exports in the far east. If we count invisible earnings, we have a surplus with the fast


growing economies of the far east. He makes a good point about the emerging economies of the former Soviet Union. Some British companies have a position in Azerbaijan, for example, and that is to be welcomed.

Mr. Mike O'Brien: The Minister cannot get away with that. Why have the Government allowed Britain to be hobbled by a trade deficit? Is not the Government's failure to deal with that the reason why British people have suffered a 7p in the pound tax rise from this Chancellor? Before the cameras come on, why does he not tell us? Perhaps he will whisper it. Do the Government admit that the country has fallen from 13th to 18th place in the international prosperity league?

Mr. Waldegrave: I welcome the hon. Gentleman to his post and congratulate him on getting both the week's soundbites into his first question, which is most impressive. The truth is that over the whole of the last year and in the first half of this year, our exports grew to record levels, outpacing the growth in imports. That performance was seldom matched by Labour any year that it was in office.

Employment Growth

Mr. Kevin Hughes: To ask the Chancellor of the Exchequer what has been the United Kingdom's employment growth since 1979; and what have been the equivalent figures for other EU countries. [695]

The Chancellor of the Exchequer (Mr. Kenneth Clarke): Between 1979 and 1990, which were comparable years in the United Kingdom business cycle, civilian employment in the UK grew somewhat faster than the average for other European Union countries.

Mr. Hughes: Is it true that since 1979 there has been only a 0.3 per cent. increase and that the European average is 5 per cent? Is it true also that we are 22nd out of the 24 Organisation for Economic Co-operation and Development countries? Is that the best that the Government can do after 16 years, or is their ambition to be bottom of every league table?

Mr. Clarke: I do not recognise any of the points that the hon. Gentleman makes. We are talking here about employment and unemployment. I gave the figures peak to peak—5.7 per cent. growth in the UK and 4.9 per cent. in the rest of Europe. Trough to trough, they are roughly comparable. A higher proportion of our work force is in employment than in any other major economy. In this recovery, our unemployment is going down and more full-time jobs are being created because we have a more flexible labour market than the rest of Europe, which is in danger of having a jobless recovery.

Mr. John Townend: My right hon. and learned Friend will appreciate that I represent a constituency in which tourism is most important, and I also have an interest in a family hotel. Does my right hon. and learned Friend agree that since 1979 the hotel and hospitality industry has played a major part in creating jobs? Does he further agree that if there were a minimum wage at anything like the level requested by the unions and by many Opposition Members, it would undermine the viability of many businesses in the tourist industry and result in thousands of jobs being lost?

Mr. Clarke: Tourism is a key source of employment in this country. Only 10 years ago, the Opposition jeered

at the very mention of the industry, saying that it did not create real jobs. In fact, it creates hundreds of thousands of jobs in this country. My hon. Friend is right to say that tourism is one industry that would be damaged by minimum wage legislation and the social chapter. The rest of Europe has job markets that are over-regulated, over cost and inflexible. Labour wants to bring that regime to this country, and jobs would be destroyed if it were ever allowed to do so.

Mr. Skinner: Why does not the Chancellor of the Exchequer start explaining to the British people the real effects of unemployment? When the Tories got into power in 1979, 1.25 million people were out of work. After 31 fiddles of the job figures, more than 4 million people do not have a job now. [HON. MEMBERS: "Question."] Half a million women who are unemployed do not register. Half a million young people—

Madam Speaker: Order. It is about time that I heard a question from the hon. Gentleman.

Mr. Skinner: He will get one soon enough.

Madam Speaker: Order. I expect one right away. The hon. Gentleman has made his point.

Mr. Skinner: When will the Chancellor and the Government start telling the truth about the figures? More than 4 million casualties do not have a job, which is three times more than in 1979. The wheels have come off the economy.

Mr. Clarke: That is a bit of tired old mythology. In 1979 there was rapidly rising unemployment and the employment of a lot of people was completely insecure because they worked in overmanned, loss-making nationalised industries and were on the brink of losing their jobs. The figures on which I rely are in labour force surveys made to International Labour Organisation standards. They show that in this recovery, we have already created more than half a million real jobs—the majority of them full time. The hon. Gentleman is peddling mythology and particularly dangerous remedies for unemployment. His policies would take us back to higher unemployment.

Mr. Deva: Will my right hon. and learned Friend confirm that this so-called endogenous growth theory is but another fancy name for state interference? If that crackpot theory were ever put into practice it would mean putting a civil servant in every boardroom in the country to manage relations.

Mr. Clarke: Of late we have not heard so much about the post-classical endogenous growth theory from the Labour party. No doubt the ratings of the shadow Chancellor with his leader would drop from 101 per cent. to 95 per cent. were he to return to that theory. Perhaps he would even be described as indispensable or unassailable—I think that is the word—in the defensive briefings emerging from the Leader of the Opposition. Crackpot theories are no substitute for policy. There is a serious endogenous growth theory, but it is not the one proposed by the shadow Chancellor, who used it as a pseudonym for state interference. He must find a policy soon otherwise he will be seen as a threat to the recovery, the new jobs and other matters that we are talking about this afternoon.

Mr. Gordon Brown: Will the Chancellor return to the question? Will he confirm that we are 20th out of 24 in


the OECD league for employment creation since 1979? Instead of being complacent, will he apologise for the fact that more than 1 million more people are out of work now than in 1979 when the Government came to power? Will he also confirm that a 10p starting rate for income tax is not only fairer and more moral, but will do more to create jobs than the abolition of capital gains or inheritance tax, which can benefit only a few?

Mr. Clarke: In 1979 there would have been fewer people unofficially out of work if they had not been on strike and not working at all. We were in the middle of a deep, diving recession, which cost many people their jobs and was due to Labour policies, which the Conservative Government then reversed. There is currently growth in employment, falling unemployment and we have introduced a flexible labour market—the hon. Gentleman knows that those factors are admired by the OECD and are being followed by the G7 countries and the European Union. Other western economies had better follow in a hurry if they want to be as good at creating jobs as we are in this country.
As for the 10p theory, the hon. Gentleman must not try to reduce policy to farce. I shall not counter him with 5p—we are not having a silly auction; we are seriously ambitious for a low tax economy in this country. I shall not criticise him too much—we back him as much as his leader does. We are anxious to protect him against the shadow Foreign Secretary and anyone else who wants to take him on. We want to keep the shadow Home Secretary and the shadow Chancellor as we like them both, and we shall do our best to keep them in their current positions.

Tourist Industry

Mr. David Atkinson: To ask the Chancellor of the Exchequer what response he has made to recent representations he has received from the tourist industry on the level of VAT. [696]

Mr. Heathcoat-Amory: I have received a number of representations in support of a reduced rate of VAT for tourism services, but there is no compelling evidence that the level of VAT in the UK places tourism at a disadvantage.

Mr. Atkinson: Does my hon. Friend agree that the British tourist industry is rightly seeking fairer competition between the tourist industries of EU member states and a level playing field on the rate of VAT imposed on those industries? Can he confirm that it is his policy to seek the eventual harmonisation of VAT throughout the European Union? If so, when does he expect it to be achieved?

Mr. Heathcoat-Amory: I do not think that harmonisation can be achieved—each member state sets its own rate of VAT. I hope that member states will always do so. As for VAT on hotels and tourist services, some European countries levy a reduced rate and some levy a standard rate which is often higher than that in the United Kingdom. There is no clear link between those differences and the relative growth in tourism services. In addition, we favour a simple system of VAT and further reduced rates would complicate it. The tourism industry is important and it benefits from the general success of the British economy, but the case for VAT concessions is not established.

Mr. Bayley: Does the Minister recall that under the last Labour Government there was a balance of trade

surplus in tourism? Now, there is a massive balance of trade deficit. Will he admit that one of the main reasons for that deficit is that, under the Conservative Government, the VAT rate has been increased from 8 per cent. to 17.5 per cent?

Mr. Heathcoat-Amory: If the hon. Gentleman studies the most recent figures from the British Tourist Authority and other organisations, he will find that over the past two years our tourist industry has performed extremely well, and better than many of its European competitors. The rate of VAT is not the determining influence. We have transformed the British economy and with that the outlook for tourism and hotel services.

Mr. Wilkinson: May I agree with my hon. Friend that the rate of VAT is not the determining factor and support him in retaining national VAT flexibility? Will he consider, however, the transport infrastructure for London, the capital being the strongest magnet for tourists from overseas? We urgently need crossrail.

Mr. Heathcoat-Amory: Yes, I note what my hon. Friend says about the need for other supporting services, including transport services. These services are taken into account in setting budgetary and expenditure plans for the coming year.

Investment Growth

Mr. Clapham: To ask the Chancellor of the Exchequer what were the figures for investment growth (a) in 1975, (b) in 1985 and (c) at present. [698]

Mr. Kenneth Clarke: Whole economy investment fell by 2 per cent. in 1975. It grew by over 4 per cent. in 1985 and by over 3 per cent. in 1994.

Mr. Clapham: I hear what the Chancellor says. The right hon. and learned Gentleman will be aware, however, that the main ingredient of growth and prosperity is investment. The evidence shows that Britain has fallen in the prosperity league from 13th position to 18th over 16 years of Conservative government. Is that not abject economic failure?

Mr. Clarke: The hon. Gentleman asked a helpful question. He cited a Labour year in which investment fell and two Conservative years when it increased. He then made ridiculous use of the prosperity league and the table that he found in the White Paper on competitiveness. We were discussing only recently the performance of the British economy, which is now strong. It is expected to grow faster than any other economy in the G7, being equal first with Germany next year.
Investment prospects are very good. Manufacturing investment has increased by 12 per cent. on a year ago. The attempt to fiddle about with obscure historical comparisons obscures the fact that we now have the healthiest economic recovery in Europe. We shall maintain that recovery with our policies.

Mr. Yeo: Has my right hon. and learned Friend noticed that chart 3.5 in the White Paper on competitiveness, which is the source document for most Opposition Front-Bench spokesmen nowadays, shows that foreign direct investment into the United Kingdom over the past 12 years has been double that into the United States, three times that into France, six times that into Germany and 20 times that into Japan?
Does my right hon. and learned Friend agree that international investors are the most objective of all investors? They make a hard-headed judgment about which country offers the best prospects. On that basis, the resounding verdict is that the United Kingdom is more successful than any other western nation.

Mr. Clarke: For its size, the United Kingdom has a greater proportion of overseas investment than any other major country. It is also by far the leading attractor of inward investment. That investment is made by business men, who use their own money and shareholders' money when choosing where best to locate a manufacturing plant in the single market of the European Union. The overwhelming preference of overseas investors is to come to the United Kingdom. That is because of our flexible labour market and business-friendly policies, and because we have created the best environment in western Europe from which to sell goods and services.

Mr. Malcolm Bruce: Does the Chancellor of the Exchequer accept that while we all welcome inward investment it is a matter of concern that an increasing proportion of investment is coming from outside? Why does the right hon. and learned Gentleman think that British-based investors are prepared to invest more abroad than in this country? Perhaps he will respond to the comment made to me by the German chamber of trade in London that the United Kingdom is a good country in which to invest and the only people who fail to realise that are British investors.

Mr. Clarke: The CBI investment outlook is extremely good. I am not sure that what the hon. Gentleman said—namely, that British investors are investing more abroad than they are here—stands up, because that is not the case. Investment here is coming from Britain. It is coming very strongly from the rest of the European Union—most notably some large German acquisitions and investments in this country. It is coming very strongly from the United States and Japan. They are all making the same judgment: this is a healthy economic environment in which to invest. One of the attractions is that we do not have the social chapter. We also do not have the minimum wage, the old-fashioned trade union legislation—all the things that the Labour party threatens to bring back.

Mr. Jenkin: Does my right hon. and learned Friend agree that genuine, productive job-creating investment follows only once one has established a stable macro-economic and competitive environment? Is not perhaps one of the unsung achievements of the Government over the past three years that we have established an increasingly low interest economy in which it is competitive to invest?

Mr. Clarke: I agree entirely with my hon. Friend. We hear a great deal from the Opposition about a strategy for investment, which I have heard about for the past three years but which so far has never had any detail attached to it at all. People do not want Government strategies. They want a market that is likely to grow, a reasonable prospect of profitability, low inflation, interest rates that will not go back to the peaks to which they used to go—the stable economic environment that our macro-economic policy is giving them. That is what matters. That is why manufacturing investment is now growing so strongly.

Mr. Andrew Smith: In place of the Chancellor's complacency, will he now tell us why investment growth

at this stage of the economic cycle is slower in this recovery than in any recovery this century? Will he tell us why on investment we are 21st in the world economic league? Will he answer the question that he failed to answer this afternoon, just as he could not answer it when my hon. Friend the Member for Dunfermline, East (Mr. Brown) put it to him yesterday: why have we fallen from 13th to 18th place in the world prosperity league?

Mr. Clarke: I thought that that was last week's soundbite. We really should move on. I am fed up with the so-called "world prosperity league", which is a complete misuse of one table in our competitiveness White Paper. If the hon. Gentleman wants to produce some more world league tables on investment, I will look at them and see where they have come from. Presumably he has added Tuvalu to the list. The fact is that at the moment we have an extremely strong recovery. We have growth in the economy, and growth in consumer demand. We have a competitive position overseas, low inflation and we have investment.
Manufacturing investment is up 12 per cent. on 12 months ago. In plant and machinery, it is up 18 per cent. compared with 18 months ago, and the CBI survey shows that the outlook is very good indeed.

Sir Peter Tapsell: In view of the keen interest that Opposition Front-Bench spokesmen have taken recently in the international competitiveness tables, will my right hon. and learned Friend try to explain to them that the countries that have advanced most rapidly up those tables—particularly the gross domestic product table that was quoted to us yesterday—are precisely those that do not have a capital gains tax or an inheritance tax, such as Singapore, Taiwan and Hong Kong?

Mr. Clarke: We have already talked about the theories, on which the Opposition have touched, but so far I have not heard any Labour spokesman praise the economic policies of Hong Kong, Taiwan and Singapore, which are three of the countries that we are told have overtaken us. I have heard them many times praise, for example, Sweden and Finland, which we have overtaken. If one looks at the comparative position inside western Europe at the moment, one will see that we are the fastest growing major economy, the one that is winning jobs. The others have market policies that the Labour party espouses.

Inheritance Tax

Mr. Corbett: To ask the Chancellor of the Exchequer what research he has done or commissioned on the effects of changes to inheritance tax. [699]

Mr. Worthington: To ask the Chancellor of the Exchequer if he will make a statement on inheritance tax. [703]

The Financial Secretary to the Treasury (Mr. Michael Jack): The effect of changing any tax is continually kept under review.

Mr. Corbett: Which does the Minister think the fairest: giving £1.6 billion to 16,500 people by abolishing inheritance tax, or investing it in training and jobs, which 12 in every 100 people in my constituency are looking for?

Mr. Jack: What I recognise is that the wealth-creating process also addresses the question of creating jobs. I notice that, in The Independent on Sunday last week, the shadow Chancellor said that he is not against wealth. What the hon. Gentleman has said now clearly shows that the Labour party is against wealth. He is divided from his own Front Bench. All I know is that Labour will tax one to hell and then tax one all the way to heaven.

Mr. Hawkins: Does my hon. Friend agree that we have just heard the authentic high-tax voice of the Labour party? We understand that our policy to ensure that wealth cascades down the generations is popular and, as soon as the Opposition realise that, they will change their tack, as they have done on every other economic policy and, in future, will support us on that as they have done on other issues.

Mr. Jack: My hon. Friend is entirely right. The hard-working people of Britain deserve the opportunity to pass on to their successors, their children and their families, the fruits of their labour. In Britain, 1.3 million people with houses valued at above £154,000 are under threat as a result of inheritance tax. That is why we have a long-term policy to remove it. The Opposition put those people at threat. Let that be noted.

Mr. Wigley: Does the Minister accept that there is no mass clamour for the reduction of inheritance tax, or any other tax for that matter, but there is mass concern about hospitals closing their doors to patients, about students who cannot obtain grants to go to university and about disabled people who cannot obtain community care? In the forthcoming Budget, we need to maintain the level of public expenditure so as to look after those services, rather than to pander to the electorate before a general election.

Mr. Jack: The hon. Gentleman shows his fundamental misunderstanding of the process of wealth creation, because that process, and the passing on of wealth between generations, help to create what we have today, which is record spending on the health service and record numbers of patients being treated. The hon. Gentleman should wake up to the reality of the modern world.

Sir Patrick Cormack: Will my hon. Friend give an assurance that the Government will never offer the British people a single ticket to a one-generation society?

Mr. Jack: I can assure my hon. Friend that the Government are dedicated to the creation of wealth and the passing on of that wealth between generations, and all the benefits that that brings.

Mr. Darling: Is it not the case that not only have the Government increased income tax by the equivalent of 7p in the pound, but the Financial Secretary has now committed the Government to abolishing inheritance tax? Does he accept that, of the combined benefit of abolishing capital gains tax and inheritance tax, amounting to more than £4.5 billion, half would go to only 5,000 people in Britain? Which is fairer—abolishing inheritance tax or cutting the starting rate of income tax to 10p in the pound?

Mr. Jack: I had better tell the hon. Gentleman that, apart from the fact that, again, his sums do not add up,

it was the Labour party in 1974 that began the process of exempting people from inheritance tax. Today, only 3.1 per cent. of estates pay it. That tax has now had its time and we have a long-term commitment to abolishing it.

Deregulation

Dr. Twinn: To ask the Chancellor of the Exchequer what priority he gives to deregulation; and if he will make a statement. [700]

Mr. Waldegrave: We give a very high priority to deregulation, particularly in order to relieve burdens on small business.

Dr. Twinn: I thank my right hon. Friend for his support for deregulation. Does he agree that that process is only just starting, and that we need more and more deregulation, and fewer and fewer regulations? Does he share my surprise that the Leader of the Opposition can be so woefully ignorant about the workings of the European Union that he can think that the social chapter can be implemented on a pick and choose basis, and that Britain would not be shafted with many more regulations if he signs up to that?

Mr. Waldegrave: It is exactly because of the regulatory effect on business, particularly small businesses, that we opposed the social chapter. It was surprising that the Leader of the Opposition, in his speech to the CBI, did not appear to know that the principal measures under the social chapter are taken by qualified majority voting.

Mr. MacShane: If the Minister is in favour of deregulation, why have he and his colleagues introduced 21 new taxes since 1992, and why, next week, when the Finance Bill is before the House, will it amount to between 450 and 500 pages of the most convoluted tax system bearing down on small businesses and middle and low wage earners?

Mr. Waldegrave: The Government intend to return to a low-tax economy when it is safe for us to do so. As for the burden on small businesses, the Department of Trade and Industry has been in the lead in that regard. For example, as well as introducing many other measures, it has exempted very small businesses from the audit procedure. The hon. Gentleman is, however, right to suggest that there is always more to do.

Building Societies

Mr. Duncan: To ask the Chancellor of the Exchequer what representations he has received from building societies wishing to become buyers and sellers of houses and not wishing to become banks; and if he will make a statement. [702]

Mrs. Angela Knight: Neither my right hon. and learned Friend the Chancellor of the Exchequer nor I have received any representations from building societies wishing to become buyers and sellers of houses.

Mr. Duncan: I am grateful for that answer.
Surely what the housing market needs is activity without house price inflation. Does my hon. Friend accept that building societies are mistaken in wanting to become


banks? They have all the resources and expertise in the market; would they not do better to become buyers and sellers of houses, in order to break the logjam? They could treat houses much as garages treat cars and institutions treat stocks and shares.

Mrs. Knight: My hon. Friend has made some interesting points. I assure him that the Building Societies Act 1986 allows societies to engage in the activity that he describes. I shall, however, convey what he has said to the Building Societies Association when I next meet its representatives.

Mr. Pike: Do the Minister and the Government feel any regret about the changing role of the building society, which is losing contact with its customers and members and is more concerned about the shareholders? We all used to believe that the building societies were on our side, but now they are concerned only about profit, and about becoming banks.

Mrs. Knight: The hon. Gentleman must realise that a great many people have benefited from the decisions made by building societies in regard to conversion and flotation. What societies need to do is assure their members of the importance of staying mutual. I urge them to do so, and hope that the hon. Gentleman will do the same.

Mr. Ian Bruce: Does my hon. Friend agree that there has never been a better time than now, in recent years, for people to enter the housing market, and that it is the Government's policy of keeping down inflation and interest rates that makes it such a good idea for people to go out and buy their own homes?

Mrs. Knight: My hon. Friend has made a good point. The average mortgage now costs about £180 per month, and rising prosperity and low inflation and interest rates have made this a very good time at which to buy a house. It is interesting to note that, 20 years ago, inflation stood at more than 26 per cent. That is the sort of problem that people experienced under a Labour Government.

Fuel Duty

Mr. Jim Cunningham: To ask the Chancellor of the Exchequer how much revenue the Treasury has received since 1993 as a result of (a) the restrictions in respect of fuel duty rebates and (b) increases in fuel duty. [705]

Mr. Heathcoat-Amory: The freeze in fuel duty rebate announced by my right hon. and learned Friend in the 1993 Budget is likely to have raised about £90 million of revenue over the two subsequent years. The increases in fuel duties announced in that Budget and in last year's Budget will have raised around £4 billion over the same period.

Mr. Cunningham: How have those tax increases helped the motor car and passenger transport industries—or is this another of the 21 Tory taxes?

Mr. Heathcoat-Amory: The hon. Gentleman should acknowledge that the fuel duty rebate paid to bus companies is worth about £225 million a year. If we add the similar amount paid in subsidy by local authorities, we find that about £500 million is paid to bus companies and their passengers, helping the companies with the good work that they do.

Mr. John Greenway: Do not increases in fuel duty impact harshly and unfairly on those who live and work in rural areas? While the Government's duty increases may be defensible on environmental grounds, does my hon. Friend agree that the 50 per cent. hike in fuel duty recommended by Opposition parties would be deeply damaging to the rural community?

Mr. Heathcoat-Amory: I fully understand and accept my hon. Friend's final observation—and, as I represent a rural constituency, I also appreciate his first point.

Taxation Policy

Mr. Jacques Arnold: To ask the Chancellor of the Exchequer what priority he gives to the interests of the family in formulating taxation policy. [707]

Mr. Jack: Our main priority is to reduce the overall burden of tax so that everyone, including those with families, can keep more of what they earn.

Mr. Arnold: While it is quite right to say that there has been a significant reduction in the burden of tax on the single taxpayer, does my hon. Friend agree that that is not yet the case for the married taxpayer and his family? Now that we have scope to get off the backs of taxpayers, may I encourage my hon. Friend to speak to the Chancellor of the Exchequer about redressing the balance so that it is in favour of the family?

Mr. Jack: I thank my hon. Friend for his Budget representation. I remind him that the real take-home pay for a single-earner couple with two children on average earnings has gone up by £80 a week since 1979, that married couples will pay almost £5 a week less in tax than most single people on similar incomes, and that, in supporting the family, the Government pay about £10 billion a year. I note what my hon. Friend has had to say.

Mr. Chisholm: Is the Minister not ashamed that a staggering one family in five is now without an adult in work? Would not the best measures to help the family be the kind of investment and welfare-into-work measures proposed by the Labour party, which include a 10p starting rate of tax, rather than the Government's proposals further to enrich a minuscule number of the very wealthy by abolishing inheritance tax and capital gains tax?

Mr. Jack: I have listened to what the hon. Gentleman says. If he listens to his Front-Bench spokesmen, he will hear about their fantasy league economic approach, about the sums that do not add up. Such policies produce only fantasy jobs. We have cut unemployment by some 700,000 and, as my right hon. and learned Friend the Chancellor said only a few moments ago, investment in industry is up 12 per cent. on a year ago. That is what creates real jobs.

Oral Answers to Questions — PRIME MINISTER

Engagements

Sir. Alan Haselhurst: To ask the Prime Minister if he will list his official engagements for Thursday 23 November. [720]

The Prime Minister: This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Sir Alan Haselhurst: Is it still the target of my right hon. Friend's Government to reduce the standard rate of income tax to 20p? In that context, did he notice that the shadow Chancellor wasted no time yesterday in his 40-minute speech talking about his 10p target? Which target does my right hon. Friend think that the nation will find more credible?

The Prime Minister: I can confirm the 20p target. There are a number of ways to reach it: reducing the basic rate, widening the 20p band or both, of course. I look forward, as soon as it is affordable, to making some progress in that direction. I found it rather odd that the shadow Chancellor did not talk about his 10p tax rate. It rather confirms my view that it is more of a gimmick than a proper policy option. I notice that the shadow Chancellor has 101 per cent. support from the Leader of the Opposition. The 1 per cent. I am sure is correct; the 100 per cent. I am not so sure of.

Mr. Blair: How can the Prime Minister seriously maintain his statement on Tuesday that the 21 tax rises that he has introduced since the last election—the equivalent of 7p on the basic rate of tax—were to protect the vulnerable when it is middle and lower-income families who have suffered most, not least from the imposition of VAT on fuel? Would he now care to explain or withdraw that remark?

The Prime Minister: Yes, of course I shall happily explain to the right hon. Gentleman. If he cares to examine the figures, he will see that, since I became Prime Minister, take-home pay after inflation has risen by £600 a year at today's prices. Real disposable income is £400 a year per head higher at today's prices. In addition, mortgage payments have fallen by £140 a month. That does not suggest to me the sort of tax hike affecting people's net disposable income that the right hon. Gentleman portrays. Can he confirm that those take-home figures are right?

Mr. Blair: Perhaps the Prime Minister would like to confirm the tax rises equivalent to a figure of 7p on the basic rate of income tax. Those are the tax rises that he introduced after he promised the British people that he would cut tax year on year. He said that he would never introduce VAT, but he did so. Is not one thing clear? Despite all the promises before the election, after his 7p extra on the basic rate, taxes will be higher at the next election than at the last election, and the British people will remember the Conservatives as the party of broken promises and unfair taxes.

The Prime Minister: I shall tell the right hon. Gentleman of three things that are clear: people have much higher net disposable income than they did at the start of this Government; interest rates have halved since their peak, cutting mortgages dramatically; and there is no one in the country who does not know that taxes would be far higher under any Labour Government than they are under this Government, and as they have been under each and every Labour Government that has ever been inflicted on the country.

Mr. Sumberg: Is my right hon. Friend aware of the notice this morning from the Department of Transport that

it has abandoned the M62 relief road, which would have devastated my constituency? Can I tell my right hon. Friend that we are all delighted at the news that that disastrous proposal has now been condemned to transport history?

The Prime Minister: I know that my right hon. Friend the Secretary of State for Transport will be grateful to have my hon. Friend's support for that decision. I know that my hon. Friend has been a formidable campaigner for that interest.

Sir David Steel: Following the belated and hesitant reaction of the international community to events in Nigeria, will the Prime Minister put greater force behind his Government's policy of promoting good governance? In view of the great number of asylum seekers coming from Zaire, will he raise that matter with colleagues in the European Union so that we may secure a timely and united response to despotic regimes?

The Prime Minister: I am not sure that I quite agree with the right hon. Gentleman in the way that he characterises the Commonwealth's response to Nigeria. I think that the response was very swift, and it was apt. There is no doubt about the nature of that regime and there is no doubt about the Commonwealth's response. Certainly, we shall look at the other points that the right hon. Gentleman raises.

Sir Roger Moate: With regard to the road programme, has my right hon. Friend heard of NOMRAM, which means "no more roads after mine", and which is a very popular position? Will my right hon. Friend ensure that, if there are to be any reductions in conventional funding, they will be more than replaced by a dynamic private finance initiative for the construction of many projects throughout the land, which are urgently needed both for jobs and for environmental reasons?

The Prime Minister: There is no doubt about the importance, both in the short term and the long term, of the private finance initiative in the case not only of roads, but of other elements of capital expenditure. I set out in a speech on Monday the extent to which the private finance initiative has already made progress.

Mr. Michael J. Martin: To ask the Prime Minister if he will list his official engagements for Thursday 23 November. [721]

The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.

Mr. Martin: Does the Prime Minister agree that those who are unfortunate enough to suffer from Alzheimer's, strokes and other long-term diseases should be able to get the best care that the national health service can offer? Does he agree that the provision of that care should never be a lottery or dependent on the part of the country that a patient comes from, but should be there for each and every person? If it is the case that the Government have put tax up by 7p in real terms, that money should go to help those patients and their carers.

The Prime Minister: The hon. Gentleman neglects to mention that we have put up spending on the national health service by 70 per cent., even taking account of inflation, since the Government came into office. The result has been a dramatic improvement in the number of


people treated, and a dramatic reduction in the time that they have to wait for treatment. Half of patients have no wait at all; of the rest, half are admitted within six weeks, and three quarters within three months. Nothing like that record has ever been seen before the arrival of this Government in office and the extra funding that the Government have provided.

Dr. Goodson-Wickes: To ask the Prime Minister if he will list his official engagements for Thursday 23 November. [722]

The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.

Dr. Goodson-Wickes: Will my right hon. Friend confirm his commitment to reducing Government expenditure to below 40 per cent. of the gross domestic product? Does he agree that the country's competitiveness into the next century depends on low spending linked to low taxation, and that that message is totally lost on the Opposition, whose spending plans simply do not add up?

The Prime Minister: Unfortunately, the Opposition's spending plans do add up. They add up to a great deal of extra money and extra taxation. For the Opposition to talk about taxation levels when they have voted against every tax reduction that we have introduced over the past 16 years, when they have stood consistently for higher taxes and higher spending and have never forgone any item of expenditure that might conceivably have been popular in any part of the country, is hypocrisy on a grand scale. The reality is that we need to cut spending to below 40 per cent. of national income as soon as possible and we need to cut spending and taxes so that the fact that this country is the enterprise centre of Europe becomes increasingly recognised, not just here and in Europe but beyond Europe. Spending more and taxing less, which the shadow Chancellor claims is possible, is not possible. Those plans do not add up.

Mr. Alan W. Williams: To ask the Prime Minister if he will list his official engagements for Thursday 23 November. [724]

The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.

Mr. Williams: It is almost five years since the Prime Minister took office. When he looks back, what does he see as his proudest achievement? Is it that we have had the lowest economic growth of any post-war five-year period, is it the 20 per cent. devaluation or tax rises amounting to 7p on the standard rate, or is his proudest achievement simply the fact that he has survived for so long in office?

The Prime Minister: The hon. Gentleman has his own suggestions and I am sure that he will not mind if I offer him some alternatives. When I became Prime Minister, inflation was 9.5 per cent., but we now have underlying inflation of 2.9 per cent. [Interruption.] Base rates were 14 per cent., they are now 6 per cent. and output is 6 per cent. higher—[Interruption.]

Madam Speaker: Order. The House must come to order.

The Prime Minister: If hon. Members care to look at the international projections about what lies ahead for the country, they will see what the Organisation for Economic Co-operation and Development has to say about our performance. They will see that we are top of the growth league and they will see inward investment flooding into the country. The deputy leader of the Labour party claims that he does not see inward investment flooding in. I suggest that he visits the constituencies of the Leader of the Opposition and of the shadow Foreign Secretary and constituencies up and down the country to see the extent to which other countries have recognised the success of this country over recent years.

Mr. Atkins: Is my right hon. Friend aware of the shambles that is Labour local government in Preston? Given that the chief executive has been sacked in highly dubious circumstances, the chief constable has issued writs on the councillors and the leader of the council, Valerie Wise, has even lost the confidence of her ward committee, will my right hon. Friend set up an investigation into the further abuse of powers by a Labour council, demonstrating yet again what Labour would be like in office?

The Prime Minister: I was not aware of the details set out by my right hon. Friend but, sadly, that is not a unique case of Labour local government by any means. We have seen what has happened in Monklands and in a large number of other Labour local authorities. If the Labour party were one bit as concerned about good government at local level as it claims to be about good government at national level, it would clean out the nest of Labour local government, which has long needed drastic action.

Mr. Tony Banks: To ask the Prime Minister if he will list his official engagements for Thursday 23 November. [725]

The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.

Mr. Banks: Does the Prime Minister agree with the words of the Minister of State for the Armed Forces, the hon. Member for Crawley (Mr. Soames), that Princess Diana is in an advanced state of paranoia?

The Prime Minister: I have no intention of being drawn into making any comments in the aftermath of last Monday.

Mr. Amess: To ask the Prime Minister if he will list his official engagements for Thursday 23 November. [727]

The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.

Mr. Amess: Will my right hon. Friend the Prime Minister join me in condemning those people who made a violent attack—[Interruption.]

Madam Speaker: Order. The House will come to order.

Mr. Amess: Will my right hon. Friend the Prime Minister join me in condemning those people who made a violent attack on the chairman of the Conservative party last week and those people who, the week before,


tried to stop my right hon. and learned Friend the Home Secretary speaking at Canterbury university? Does my right hon. Friend have any idea whether those people are members of new Labour, of old Labour or of fascist Labour?

The Prime Minister: I condemn anyone who resorts to violence or intimidation to force their own way in democratic politics. They do nothing whatever for their cause. They merely show that their argument does not stand up to rational debate. They deserve condemnation from every corner.

Mr. Mackinlay: Will the Prime Minister tolerate the Minister of State for the Armed Forces continuing to act

as the Prince of Wales's butler? Can we have an assurance that the Minister of State will not act on behalf of—[Interruption.]

Madam Speaker: Order. The hon. Member for Dover (Mr. Shaw) will remain silent while questions are being asked.

Mr. Mackinlay: Can we have an undertaking that the Minister of State for the Armed Forces will not speak on constitutional matters which are the sole preserve of the Prime Minister? Will the Prime Minister sack the Minister of State for speaking out of turn against the Princess of Wales?

The Prime Minister: I do not expect any more comments, Madam Speaker.

Business of the House

Mr. Jeff Rooker: Will the Leader of the House please give us the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will now be as follows:
MONDAY 27 NOVEMBER—Until about 8 o'clock, Second Reading of the Education (Student Loans) Bill.
Motion on the Contracting Out (Administration of the Teachers' Superannuation Scheme) Order.
TUESDAY 28 NOVEMBER—As I announced last Thursday, my right hon. and learned Friend the Chancellor of the Exchequer will open his Budget statement, debate on which will then run through Wednesday 29 November, Thursday 30 November and Monday 4 December, and will be brought to a conclusion on Tuesday 5 December. The intervening Friday is a non-sitting day.
WEDNESDAY 6 DECEMBER—Until about 7 o'clock, Second Reading of the Audit (Miscellaneous Provisions) Bill.
Remaining stages of the Chemical Weapons Bill.
THURSDAY 7 DECEMBER—There will be debates on motions for the Adjournment of the House. Subjects to be announced.
FRIDAY 8 DECEMBER—There will be debates on motions for the Adjournment of the House. Subjects to be announced.
The House will also wish to know that European Standing Committee B will meet at 10.30 am on Wednesday 29 November to consider European Community document Nos. 8273/95 and 9284/95 relating to equal opportunities for men and women.
[Tuesday 28 November: Budget Statement
The following document is relevant: the unnumbered Explanatory Memorandum submitted by Her Majesty's Treasury on 26 July 1995 relating to the Council Recommendation to the United Kingdom with a view to bringing an end to the situation of an excessive deficit in the United Kingdom, prepared in regard to Article 104c(7) of the Treaty establishing the European Community.
Wednesday 29 November:
European Standing Committee B—Relevant European Community documents: 8273/95 and 9284/95, Equal opportunities for men and women. Relevant European Legislation Committee reports: HC 70–xxvi (1994–95) and HC 51-i (1995–96).]
For those who were not hanging on my every word last night or did not pay sufficient attention, the House might like to be reminded that I said that, subject to the progress of business, the House will rise at the conclusion of business on Wednesday 20 December until Tuesday 9 January. For Easter, again subject to the progress of business, the House will rise at the conclusion of business on Wednesday 3 April until Tuesday 16 April.

Mr. Rooker: May I thank the Leader of the House for the repetition of the early notice of the dates of the recesses for Christmas and Easter? Will he confirm that

Wednesday 20 December will be a full working day, with Wednesday morning Adjournment debates and Scottish questions in the afternoon?
While on the subject of Scottish business, I and others who were present yesterday heard the Secretary of State for Scotland in Scottish questions say that he would make an announcement about the future government of Scotland on St. Andrew's day. May we have a commitment that the Secretary of State for Scotland will make a full statement in the House on any changes, so that Members have a chance to debate them before they are announced in Glasgow?
Will the Leader of the House arrange for an early statement next week by the Secretary of State for Social Security, so that he may give an interim response to the fifth report of the Select Committee on Social Security, which was published today? That report discloses that there are over 10 million national insurance numbers more than there are people aged over 16, that the integrity of the national insurance system is at stake and that it allows organised criminals to perpetrate fraud.
Bearing in mind the fact that there is also known organised fraud in operating immigration policy, which is being discussed in respect of the proposed Bill on asylum, will the House be told next week why Her Majesty's Government's proposal in 1990 to close the "Day of the Jackal" loophole allowing access to birth certificates has not yet been closed? Five years ago, a commitment to do so was made in a White Paper. In May, the Prime Minister told me and others that there was insufficient parliamentary time for the change. In this Session, there is clearly time for such a Bill, with which we would agree. The Leader of the House was asked about it last night. Has he made any inquiries about it?
I have two further brief points. Bearing in mind the Budget statement next Tuesday, will the local government settlement be announced on Thursday? Clearly, the Budget statement will have a massive impact on local government expenditure. It is important that those facing cuts in education and social services—provided for the public—know about the Budget's implications as quickly as possible.
Given that at present there is a good deal of traffic on the World Service network from Argentina, will the Leader of the House assure hon. Members that next week there will be a Foreign Office statement that it is not proposing to cut World Service funds? It would be highly short-sighted and not in the interests of the United Kingdom to lose a voice that creates a very favourable climate for British business around the world. There is a rumour that the Foreign Office plans to cut the final year of the three-year settlement on funds made in 1994. That would be totally unacceptable to the House.

Mr. Newton: I shall take those questions in order. First, I certainly expect 20 December to be a normal day, although, obviously, I cannot at the moment predict the business. I anticipate, however, that we shall have the normal Wednesday debate just before recess, in which I am here for three hours to do my best to answer any hon. Member who cares to bowl a fast ball at me.
Secondly, it is certainly my right hon. Friend the Scottish Secretary's intention to make a statement to Parliament on Scottish proposals before announcing them anywhere else.
Thirdly, on social security, the hon. Gentleman will understand that there are conventions about the amount of time that the Government take to respond to Select Committee reports. Indeed, there is usually criticism in the House if an instant response is made. I shall bring his point to the attention of my right hon. Friend the Secretary of State for Social Security, and, indeed, consider the other points that he raised, which I have not yet had a chance to look into since last night.
I anticipate a statement on the local government settlement next Thursday. I seem to be being unusually helpful to the hon. Gentleman today. It must be the charming way in which he puts his questions. However, I cannot be quite so helpful on his last question. He will understand that I am not in a position to anticipate what may be in or follow from the statement of my right hon. and learned Friend the Chancellor of the Exchequer next week. But I should make the point that my right hon. and learned Friend the Foreign Secretary will be answering questions on the following day, Wednesday 29 November.

Sir Anthony Grant: Does my right hon. Friend share my disgust at the growing and pernicious habit of cheque-book journalism, which is perverting the course of justice in this country? If the Government are not able to find time to do something about such a practice, will they look sympathetically on a private Member's Bill to put a stop to it?

Mr. Newton: I of course share my hon. Friend's feelings about some of the suggestions that have been made in relation to the Rosemary West case. Of course the Government, in various aspects, will be considering any lessons that may be drawn from that case.

Mr. Archy Kirkwood: May I, too, acknowledge how helpful it is to have the Christmas and Easter recess dates announced so far in advance? It is enormously helpful for future planning. Will the Leader of the House clarify an earlier answer that he gave about the business on 20 December? I understand a full day's business to include certainly the Scottish questions slot planned for that day. May I press the right hon. Gentleman further on the statement that the Secretary of State for Scotland may or may not be making on 30 November? It is important that hon. Members have a chance to cross-examine the Secretary of State, particularly on any proposals that he may have for the Scottish Grand Committee, because the succession of meetings for the Scottish Grand Committee that will flow for the rest of the year may be dramatically affected by any changes that he may make. Finally, can we anticipate an uprating social security statement next week?

Mr. Newton: In the spirit of—actually usual—helpfulness that I am adopting this afternoon, I anticipate that there will be a social security uprating statement on the day after the Budget, Wednesday 29 November. The pattern will therefore be the Budget on Tuesday, social security on Wednesday and local government on Thursday.
In relation to the Scottish Secretary's statement, I do not think that I can add to what I have already said. I have made it clear that I expect that the House will have an opportunity to hear a statement on the matter.
I did not think that I was obscure in any way in what I said about 20 December. I said that I expected it to be a normal business day. I cannot predict what will come after Question Time, but I certainly anticipate that the Wednesday morning debate to which I referred will be followed by questions, which will be followed by I know not what, for I know not how long.

Sir Dudley Smith: Has my right hon. Friend seen early-day motion 65 concerning my constituent, Mrs. Teresita Bentley of Leamington Spa, who faces deportation because of the loss of her battle for custody of her two-year-old child Catherine, in the face of opposition from her estranged and unhelpful husband?

[That this House believes that Mrs. Teresita Bentley of Leamington Spa, a well-educated, professional woman from the Philippines, should not be deported from this country, following her High Court failure to secure custody of her two-year-old daughter, Catherine, and that such an enforced separation would deny her permanent right of access to her child via her English husband, in a callous and insensitive way, not in keeping with the United Kingdom's reputation for justice and fair play in humanitarian issues.]

In the circumstances, will my right hon. Friend bear it in mind that this is a sad case, in that Mrs. Bentley may not see her child for many years should she be deported? The case has profound humanitarian implications. I do not expect the Leader of the House to grant a debate on that subject, but could he encourage Home Office Ministers to make a statement about the case next week or, at the very least, to arrange a question on the subject?

Mr. Newton: I understand that my hon. Friend has in fact written to my right hon. and learned Friend the Home Secretary on behalf of Mrs. Bentley, for reasons that he outlined in his question I understand also that those representations are being carefully considered. That seems to be the appropriate response at this time.

Mr. Harry Barnes: There is not a great deal of Government legislation in the coming programme, and the private Member's Bill ballot took place today. Will the Leader of the House ensure that a second Standing Committee is set up to debate private Members' Bills, to avoid the situation that arose in the previous Session when a Bill—the Civil Rights (Disabled Persons) Bill—which was solemnly supported in the House could not progress because of the procedural devices that were used to stop it? Private Members' Bills should have the opportunity to advance if sufficient Members support them.

Mr. Newton: The House passed the relevant Sessional Order yesterday in respect of time for private Members' Bills and, as the hon. Gentleman said, the ballot took place today. I remind him that, as has been the case for several years, the Sessional Order provides for more time than the Standing Orders themselves. Beyond that, however, I have no plans to change the way in which private Members' business is conducted.

Sir John Stanley: Is my right hon. Friend aware that, in successive meetings between Kent local authorities and Ministers at the Department of Transport, Ministers gave undertakings that the new noise insulation regulations relating to railways would be debated and that those undertakings were recorded in the


official departmental minutes, copies of which I have sent to him? Is he further aware of the motion tabled by me and a number of my hon. Friends in opposition to those regulations and of a similar motion tabled by the Leader of the Opposition? Against that background, will my right hon. Friend take early steps to fulfil the undertakings given by Ministers that the regulations will be debated?

Mr. Newton: I shall of course consider what my right hon. Friend said.

Mr. Alex Salmond: As to the statement by the Scottish Secretary, I do not agree with the Labour Front Bench: I think that all the parties in Scotland would be quite capable of making statements to the Scottish people before the issue was debated in this place.
The House must realise that expectations about the Secretary of State's statement have been raised considerably by the Prime Minister's intervention. I understand that its theme is the sensitivity of this place to Scottish requirements, but how can that be when the Tory Whips Office floods the Order Paper during Scottish questions? Does the Leader of the House approve of the fact that six out of the first 10 questions asked during Scottish questions yesterday came from English Tory Members of Parliament, whose only interest in Scottish affairs is to act as cheerleaders for beleaguered Scottish Office Front Benchers?

Mr. Newton: On the latter point, I simply remind the hon. Gentleman that whether he likes it or not—I must confess that I do like it—this is a United Kingdom and hon. Members from any part of it are entitled to take an interest in the affairs of every part of it.
As to the first part of the hon. Gentleman's question, he will have sensed that there is little agreement from any part of the House—let alone the Opposition Front Bench—with his assertion that matters affecting the House should not be presented first to the House. His view is not shared by many other hon. Members.

Mr. Bob Dunn: Will the Leader of the House please arrange to have an urgent, early debate on the implications of signing the social chapter, given that that would lead to the reintroduction of the closed shop, the minimum wage, union-only labour and workers' councils? Those implications are not appreciated by many in this place or by many outside it.

Mr. Newton: Indeed, and I would add that recent evidence suggests that the implications of signing the social chapter are not even appreciated by the leader of the Labour party.

Mr. Dennis Skinner: Will the Leader of the House arrange for the Secretary of State for Social Security to make a statement on early-day motion 74?
[That this House, mindful of the current review by the Industrial Injuries Advisory Council of the criterion used since 13th September 1993 in the diagnosis of coalminers, believes that the requirement for X-ray evidence of attendant pneumoconiosis should be dropped, the FEV1 test replaced by a sensitive medical examination, the qualifying period reduced to 10 from 20 years in the appropriate employment and that the diagnosis in posthumous cases be decided on the evidence of the post mortem report.]
A copy is being handed to the Leader of the House now. Some months ago, members of the miners' group—in which I now declare my interest—called for a change in the conditions that apply to payments for those with chronic bronchitis and emphysema. We also asked the Government to modify the FEV test, to reduce the qualifying period from 20 to 10 years, and to drop the X-ray evidence requirement. We have made those demands, but we are still awaiting a reply. Will the Leader of the House ask the Minister to get a move on?

Mr. Newton: I shall certainly draw my right hon. Friend's attention to the hon. Gentleman's characteristically robust remarks. A little bird tells me that the current review by the independent Industrial Injuries Advisory Council will cover all the criteria used in deciding claims for benefit for chronic bronchitis and emphysema sufferers. The Government will give full and careful consideration to any recommendations that the council may make.

Mr. Douglas French: Is my right hon. Friend aware that the trial of my constituent, Mrs. Rosemary West, has given rise to grave public concern about many issues? He has already indicated his intention to examine the issue of cheque-book journalism. Will he provide an early opportunity to debate some other issues, such as the need to put in place a much more comprehensive, national system for sharing information about missing persons?

Mr. Newton: I have already said that the various Departments concerned, and no doubt other organisations, will look very carefully at any lessons that may be learned from events in my hon. Friend's constituency. The Government will consider whether any additional guidance is necessary in areas within our responsibility.
As to my earlier comments about cheque-book journalism, I should have acknowledged that not only will the Government consider the need for new legislation, but the Press Complaints Commission—for which there may also be implications—has decided to examine whether it might do more in that regard.

Mr. Dennis Canavan: May we have an early statement about the duties and responsibilities of Ministers? Does the Leader of the House agree that it would be absolutely outrageous for a Cabinet Minister to use or abuse his position in order to discriminate unfairly in favour of his constituency to the detriment of a neighbouring constituency? Therefore, could there be an investigation into the conduct of the Secretary of State for Scotland who, in collusion with his crony, the chairman of Forth Valley health board, seems hell-bent on centralising more and more national health service facilities in his constituency to the disadvantage of people living in the Falkirk area?

Mr. Newton: It would be a matter for you, Madam Speaker, rather than for me, but some of the phrasing of what the hon. Gentleman has just said leaves a certain amount to be desired, as he certainly would not have wished to use those terms outside the House. Having said that, I shall of course draw his remarks to the attention of my right hon. Friend the Secretary of State.

Mr. Nicholas Winterton: Does my right hon. Friend accept that the People's Republic of China is an important export market for the United


Kingdom, just as the United Kingdom is a good market for goods from the People's Republic of China? Is he aware that the People's Republic is currently greatly limiting its imports, with on-going consequences for the companies in Britain that look to the People's Republic as a market for their manufactured goods? I refer particularly to an important company in my constituency, Rieter Scragg Ltd., which exports textile drawtexturing machinery. Will he arrange for the appropriate Minister to come to the House and explain what action can be taken to create a better environment for free trade between our two countries?

Mr. Newton: My hon. Friend well knows the strength of the United Kingdom Government's support for free trade. On the specific point that he raised, I shall bring his remarks to the attention of my right hon. Friends, but as I have said, my right hon. and learned Friend the Foreign Secretary will be answering questions on Wednesday 29 November and my right hon. Friend the President of the Board of Trade will be answering questions on Wednesday 6 December.

Mr. Max Madden: As the Leader of the House has announced two debates for two weeks today and tomorrow on the Adjournment of the House, will he urgently consider allocating one of those days to the debate on the future of the monarchy?

Mr. Newton: I propose to say exactly what my right hon. Friend the Prime Minister said several times 20 minutes ago; that appears to be an attempt to invite me to comment indirectly when my right hon. Friend the Prime Minister declined to comment directly. I shall comment neither directly nor indirectly.

Mr. Piers Merchant: In the light of the excellent points raised by my hon. Friends the Members for South-West Cambridgeshire (Sir A. Grant) and for Gloucester (Mr. French), although I appreciate that cheque-book journalism is being studied as part of that consultation, will my right hon. Friend consider giving the House the opportunity to debate the matter at length, so that we can hear examples of the pernicious effects of cheque-book journalism in the West case and many others? I make that request as a former journalist who finds the practice absolutely abhorrent.

Mr. Newton: As I have already said, I understand the concerns that led several hon. Members to raise the matter with me today. However, the proper time to consider whether a debate is needed, on either general or specific matters, would be when the various bodies and organisations to which I referred have had an opportunity to consider the lessons and what they might do.

Mr. Eddie Loyden: Will the Leader of the House ask the Secretary of State for Transport to investigate the decision by the Mersey Dock and Harbour Company to end responsibility for the employment of dock workers? He will know that the Rochdale report, produced in the 1960s, recommended that there should be fewer such employers in the port transport industry. The decision will mean that once again there will be a large number of employers of casual dock labour, reviving the casual nature of the port transport industry.

Mr. Newton: Helpful as ever, I have arranged for my right hon. Friend the Secretary of State for Transport to answer questions next Monday.

Mr. Tony Banks: I read some of the proceedings of the trial of Rosemary West, but I found it so disgusting and abhorrent that I could not continue. I understand why the Government should be worried about cheque-book journalism and the fact that witnesses have been approached, but what about the jurors? They spent week after week listening to the most disgusting and foul proceedings. Is it not time for a debate on counselling for jurors? I am worried that they have suffered a trauma that will affect them for the rest of their lives. May we have a debate on the role of jurors and counselling?

Mr. Newton: I shall bear the hon. Gentleman's remarks in mind. I have no doubt that it was distressing for people to sit through those proceedings. I have gained the impression, although I do not have a statement to this effect before me, that counselling has been considered and that some has been arranged.

Mr. John Marshall: Will my right hon. Friend arrange an early debate on early-day motion 77?
[That this House condemns Islington Council for being placed bottom in the GCSE league tables and calls for a radical change in its education policies as well as recognition of past errors by the Labour leadership; and calls upon all Islington parents to bring pressure on their council to adopt Conservative education policies that will meet the needs of all local parents.]
Does my right hon. Friend agree that education should provide an escalator of opportunity for all children, which is not happening in Islington? Does not that demonstrate that old Labour or new Labour—call it what one will—does not produce the education standards that children have a right to demand? Does that explain why some parents seek to opt out of sending their children to schools run by Islington's local education authority?

Mr. Newton: Whatever we call Labour, I am sure that all parents in Islington—including the Leader of the Opposition, to whom my hon. Friend was presumably referring—will want to know why the authority is performing so badly and is not doing a good job for pupils educated in the borough.

Mr. Bernard Jenkin: Rather than have just a statement on the Social Security Select Committee report published today, it would be helpful to have a full debate. That would give hon. Members an opportunity to demonstrate not only that the report welcomes the Government's initiative against fraud but that Labour's policies are non-existent and that it is simply following in our footsteps.

Mr. Newton: I am glad that my hon. Friend serves as a member of the Social Security Select Committee, and I am grateful for his comments. As he rightly said, the Committee welcomes the priority given by the Government to tackling fraud.

Mr. Denis MacShane: Will the Leader of the House find time for an early debate on a non-partisan, non-party subject about which the whole nation has been talking this week? It is absurd that everybody is talking about a certain matter outside the House, but that the House


cannot discuss it. I am not concerned with the personalities involved or with the remarks made, but the constitutional implications of a 19th-century arrangement for the head of state may not be appropriate for the 21st century. If the Leader of the House and the Prime Minister want the agenda for that matter to be set by the tabloid press and television executives, they will continue their say nothing, see nothing, hear nothing attitude in the House. The nation would like the House to debate the monarchy that we want in the 21st century.

Mr. Newton: I will not add to that which my right hon. Friend the Prime Minister and I have already said.

Mr. Alan Duncan: Will my right hon. Friend consider a debate soon on the office costs allowance? Given that the leader of the Labour party has been unable to answer even one of four letters sent to him personally by my right hon. Friend the Member for Peterborough (Dr. Mawhinney), the right hon. Gentleman appears to have a problem staffing his office. May we have an urgent debate, to find a way of remedying that grave discourtesy?

Mr. Newton: If a letter has been sent to the right hon. Gentleman in his capacity as the Leader of the Opposition, that would relate to the Short money rather than to the office costs allowance, which the House debated in the previous Session when it made arrangements covering the whole of this Parliament. I am sure that the Leader of the Opposition will respond when my hon. Friend's remarks are reported to him. I would not wish to reopen that issue in the lifetime of this Parliament.

Mr. Paul Flynn: I refer the Leader of the House to early-day motion 1:
[That this House supports Bristol Coroner Paul Forrest's call of 14th November 1995 for a ban on bull bars at the inquest on Helen Baggs aged 10 of Melksham who was killed by a Land Rover fitted with bull bars; believes that many deaths and serious injuries would have been avoided if the Government and the European Commission had swiftly acted to ban bull bar fashion accessories that concentrate and multiply the force of collisions at the level of a child's head.]
When may the House debate that and the decision yesterday by CGA Direct Line Insurance not to insure in future any vehicle fitted with bull bars? Can we end the silly row between the Government and the European Commission over who should take the decision to introduce a ban on bull bars? We should act before more children are killed, now that hard-headed businesses say that vehicles fitted with bull bars are too dangerous to insure.

Mr. Newton: I commented on that matter to the hon. Gentleman last week, but that is not to say that I object to him raising it again. If he intends to raise that subject every week, I had better prepare different answers, so that I do not repeat myself. At present, I am not in that position. No doubt the hon. Gentleman is also making representations to Commissioner Kinnock, with whom his links are possibly closer than mine. Given that the Government discourage manufacturers from providing bull bars and vehicle owners from using them, I think that the insurance company decision to which the hon. Gentleman referred seems reasonably sensible and welcome.

Mr. Peter Bottomley: For the avoidance of doubt, may I say to my right hon. Friend that if there is

no cut in the funding to the BBC World Service, it would be nice to have an opportunity next week to say thank you?

Mr. Newton: Whether people want to throw bouquets or brickbats next week, they should have the opportunity to do so when my right hon. and learned Friend the Foreign Secretary appears at the Dispatch Box to answer questions on 29 November.

Mr. Andrew Miller: In the light of recent publicity about the use of transgenic animals in human genetic research, and particularly in the light of the actions of some insurance companies, will the Leader of the House find time next week for an urgent and full debate on the recent report of the Select Committee on Science and Technology, which was unanimously agreed by that Committee?

Mr. Newton: The hon. Gentleman will be aware that we have made what we hope will be improved arrangements in the present Session—with the so-called Jopling resolutions—to allow greater opportunity for debating Select Committee reports. No doubt the hon. Gentleman will wish to draw those remarks not only to my attention but to the attention of the Chairman of the Liaison Committee.

Dr. Robert Spink: Will my right hon. Friend find time next week to debate a subject of concern to many of my vulnerable constituents—the delivery of community care by social services in Essex? I understand that events may have overtaken my question, but if we have time to debate the matter next week, can we draw attention to the excellent, dedicated service and care provided by those in the front line in social services in Essex?

Mr. Newton: Yes—I am very much of that view. Although my constituency does not immediately border on my hon. Friend's, I am well aware that there has been much concern about the way in which some aspects of community care have been working in Essex. I hope that those matters can be fully considered. Nothing takes away from the fact that those providing such services work hard to provide dedicated care for many people.

Mr. Mike Gapes: I add my voice to those of the hon. Member for Eltham (Mr. Bottomley) and my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) in asking for a debate next week on the subject of the funding of the World Service. Does the Leader of the House agree that it is our finest national asset and does far more to influence other countries in favour of Britain and British interests than anything else—certainly, more than the Government or the royal family are doing at present?

Mr. Newton: As an occasional listener to the World Service—I used to be a more regular listener when I drove home every night—I know that we all value the service that it provides. That is one reason why I am usually willing to be interviewed on it about subjects such as the Queen's Speech; it conducts such interviews very nicely.

Mr. Matthew Banks: Will my right hon. Friend try to find time for a debate, perhaps up to 7 o'clock, when we could discuss the nonsensical suggestions of the hon. Member for Banff and Buchan (Mr. Salmond), who spoke earlier? We could then tell him


that many Conservative Members who regularly attend Scottish questions have a clear and obvious link with Scotland. In any case, Scotland is an integral part of this Parliament and will remain so. Until 10 o'clock, we might have a debate on the importance of spending constraints in the public sector to achieve lower taxation—we could thus contrast Government policies with those of Opposition Members, who come up with many gimmicks rather than carefully costed policies.

Mr. Newton: I have much sympathy with the first part of my hon. Friend's remarks. On the latter part of his remarks, I merely observe that the House will have no fewer than five days to discuss the sort of matters to which he referred and I am not sure that I want to promise to return to them yet again on 20 December.

Mr. George Foulkes: As you know, Madam Speaker, I was one of the casualties of Scottish Question Time yesterday. The problem was not so much English Tories, but the fact that hon. Members on both sides of the Chamber did not heed your admonition for short questions and short answers—none more so than the king nat himself. On the subject of next week's business, when are we to have a statement from the Secretary of State for Scotland on the local government settlement, so that I can ask questions about the underfunding of the south Ayrshire and east Ayrshire authorities?

Mr. Newton: Long question; short answer. That one is still a bit ahead.

BILL PRESENTED

ARMED FORCES

Mr. Secretary Portillo, supported by Mr. Secretary Howard, Mr. Secretary Lang, Mr. Attorney-General and Mr. Nicholas Soames, presented a Bill to continue the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957; to amend those Acts and other enactments relating to the armed forces; to make further provision in relation to proceedings before service courts; to provide for the fingerprinting of offenders convicted in service proceedings; to amend the Courts-Martial (Appeals) Act 1968; to make further provision in relation to complaints to industrial tribunals by members of the armed forces; to provide for further exemptions from the Firearms Act 1968; to make further provision in relation to Greenwich Hospital; to amend the Visiting Forces Act 1952; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 5.]

Orders of the Day — Chemical Weapons Bill

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): I have it in Command from the Queen to acquaint the House that Her Majesty having been informed of the purport of the Chemical Weapons Bill has consented to place her Prerogative, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Order for Second Reading read.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): I beg to move, That the Bill be now read a Second time.
The Bill will enable the United Kingdom to implement the requirements of the chemical weapons convention. I think that it will be warmly welcomed by right hon. and hon. Members on both sides of the House.
The provisions of the Bill will enable the UK to fulfil all its convention obligations. We have done our best to respond to comments and concerns expressed during a quite lengthy consultation period.
The convention was signed in 1993 after 20 years of difficult and tortuous negotiation. It is unique in the history of arms control. It is the first treaty to provide for a verifiable worldwide ban on an entire class of weapons of mass destruction. I am pleased to say that the UK has played an active part in support of the treaty throughout the negotiations. The treaty holds the promise of ridding the world of chemical weapons. The Government take it extremely seriously and support it fully. In total, 159 states have signed the convention. We hope that many others will sign in the near future.
The convention enters force six months after 65 countries have ratified it. So far, 42 have done so. It is estimated that the convention is unlikely to enter into force until the second half of next year. Two key signatories—the United States and the Russian Federation—have yet to ratify. As they hold 90 per cent. of the world's stockpile of chemical weapons, we hope sincerely that rapid UK ratification will help to encourage these two states to ratify the convention.
I shall outline briefly the requirements of the convention. First—

Mr. Nigel Forman: Will my hon. Friend be telling the House later why two large powers with a formidable capacity in this context seem reluctant to sign and ratify as quickly as they should?

Mr. Oppenheim: To be honest, I was not intending to do so. My hon. Friend might care to raise that issue if he is called to speak.
The convention prohibits the acquisition, development, production, stockpiling, transfer and use of chemical weapons. It requires their destruction. It bans military preparations and—

Mr. Tam Dalyell: It so happens that I am a member of the central Asian group, which has recently seen the Prime Minister of Kazakhstan, who happens to


be in London. Would it not be sensible to have a discussion with the Kazakh leadership? The Kazakhs are involved with chemical weapons, as they are with nuclear weapons. Would it not be sensible, while their Prime Minister is in London, to have a frank discussion about this urgent matter? The hon. Member for Carshalton and Wallington (Mr. Forman) has raised a vital issue.

Mr. Oppenheim: I can assure the hon. Gentleman that our doors are open to the Kazakhs if they wish to have discussions. The hon. Gentleman has raised a fair point. It is the Russian Federation, however, that is the main keeper of chemical weapons in that area. The hon. Gentleman is right to say, of course, that there are weapons of mass destruction in Kazakhstan.
The convention bans military preparations for the use of chemical weapons and requires the destruction of all existing stocks of chemical weapons as well as the destruction of production facilities.
The chemical weapons convention provides a powerful verification regime. It is unprecedented in its scope and extent. Its effective operation will provide the assurance that the threat from chemical weapons has, as far as possible, been removed.
Two of the provisions of the convention are particularly important. First, declarations are required periodically from companies and other bodies using chemicals of concern. The requirements relating to the chemicals are graded according to the threat that they pose. Secondly, but perhaps most important, inspections will be undertaken by an international inspectorate based in The Hague. There will be two types of inspection: routine inspections to check the accuracy of declarations and "challenge inspections", which will be undertaken at short notice at any site where there are grounds to suspect that it is in breach of the convention. "Challenge inspections" can be required by any state that is party to the convention.

Mr. Dalyell: I ask for clarification on the Minister's first point—the commercial use and the so-called dual-purpose problem, which Dr. Julian Perry Robinson and others have explained to the officials, and doubtless those officials understand very well. Is the industry satisfied, or is it still worried?

Mr. Oppenheim: We consulted the industry pretty widely, and it was involved during the negotiation of the convention, so it has been involved in consultations over a long period. My understanding is that it is now as satisfied as it can be with the provisions. If the hon. Gentleman is talking primarily about using some of the very dangerous chemicals for legitimate research purposes, he will find, if he bears with me, that the provisions for that are reasonable; but if he disagrees at the end of my speech, I will come back to it when I reply at the end of the debate.

Mr. Harry Cohen: Will the Minister give way?

Mr. Oppenheim: Will the hon. Gentleman just allow me to make a little progress? If he is still dissatisfied with my performance, I will allow him to come in later.
I shall talk briefly about the new international body that will be set up in The Hague: the Organisation for the Prohibition of Chemical Weapons. The main function of

its staff will be inspection and verification. A preparatory commission is already working in The Hague on the detailed arrangements for the implementation. The United Kingdom is playing an active part in that work and will continue to do so.
Just as important as the international inspection authority is the UK national authority, because each state that is party to the convention is required to designate a "national authority" as a focal point for the implementation of the convention in that state. We intend that the Department of Trade and Industry will be the national authority for the United Kingdom. The DTI will be responsible for collecting information from industry and others affected by the convention, processing it and presenting it to the OPCW. It will help inspected sites to deal with the inspection process and will monitor compliance with the convention.
I wish to talk about the consultation process, which has been extensive. The DTI issued a discussion document in January, and the Bill was issued in July for consultation. We believe that, in an area such as this, extensive consultation with industry, with academia and research bodies is absolutely essential and we have taken on board many of the comments that have been made, so far as we can within the limits of the convention. Industry has been involved throughout the implementation of the convention and during its negotiation. My understanding—I have no indication to the contrary—is that industry and academia fully support the convention. They, as much as we, want to remove the threat of chemical weapons, and they have been extremely helpful in helping us to put in place the tool to do it. They deserve our thanks for that.
A number of concerns have arisen as a result of the consultation process. I shall deal briefly with the way in which we tried to deal with those concerns. There is no question but that the controls required by the convention will affect industry. There is no getting away from that. The Government have kept in close touch with representatives, particularly of the chemical industry, during the negotiation of the convention, and we continue to work with industry to ensure that, in complying with the convention, burdens on business and legitimate research establishments—universities, and so on—are kept to the minimum.
Compliance costs assessments originally suggested that the costs to industry would be as high as £8 million. However, since then the Department of Trade and Industry has done a great deal of work in trying to simplify the complicated forms originally put forward as a result of the convention and we believe that that will significantly reduce the work load and make it far easier for people to complete the forms without in any way compromising the convention itself. We are working further on that and we expect that that will result in further cost savings. I pay tribute to the civil servants who have worked on that. They have done an exemplary job in trying to simplify what were originally incredibly difficult and complicated forms.

Mr. Dalyell: I am sure that the Minister's tribute to the civil service is justified. With regard to the legitimate research establishments, does the Minister intend to say anything about the future of Porton Down? I would like to deploy a case that Porton Down should be retained, above all in order to monitor the innovative developments in the chemical field, not least in their military applications.

Mr. Oppenheim: The hon. Gentleman is right. Porton Down will play an extremely valuable role in aiding and assisting the DTI and advising it on some of the chemicals. We envisage Porton Down having an active role in that. I hope that I can reassure the hon. Gentleman on that point.
A second point raised, particularly by industry, was the difficult issue of commercial confidentiality. That has already been dealt with through strict rules laid down in the convention and the legislation insists that those rules are strictly maintained. The Bill makes provision for giving statutory protection to information collected as a result of either the Act or the convention.
One final issue raised some concern during consultation. I hope that I can clear the air by making it crystal clear that I intend that the DTI national authority should issue an annual report about its activities and the operation of the convention. That will help to make its work more transparent and enhance proper parliamentary scrutiny. It is my intention that it should issue an annual report.
Clauses 1 to 3 prohibit chemical weapons. They implement the prohibition on chemical weapons contained in article I of the convention.
Clauses 4 to 10 set out procedures for the identification and, if necessary, the seizure and destruction of chemical weapons. Because chemicals that may be used in the production of chemical weapons may also have peaceful uses, the clauses set out the procedure through which it can be established whether the object is a chemical weapon.
Clause 4 enables the Secretary of State to obtain information about suspicious objects through the issue of notices. Where it is believed that the object is a chemical weapon, clause 5 enables and authorised person to enter premises to remove or immobilise it. If, after a period, it is still believed that the object is a chemical weapon, clauses 6 and 7 provide for the destruction of the object. Limited provision is made for compensation in clause 8. Clause 9 creates offences relating to the destruction of chemical weapons, such as giving false information. Clause 10 contains definitions relating to the destruction itself.
Clauses 11 to 18 set out procedures for the destruction of any facility which may be identified as a chemical weapons production facility. They implement the obligation in article V of the convention not to construct any new chemical weapons production facilities and set out procedures for their destruction or alteration. Clause 11 prohibits anyone from making a facility for producing chemical weapons. Clause 12 enables the Secretary of State to obtain information about suspicious facilities.
Where a facility is believed to be a chemicals weapons production facility according to the definition contained in the convention, clauses 13 to 15 enable the Secretary of State to require it to be destroyed through the issue of a notice on the relevant person. If the notice is not complied with or no relevant person can be found, the Secretary of State may himself arrange for the destruction of the facility.
Clause 16 enables any person to apply to the court for compensation in certain circumstances if they have suffered a loss as a result of the destruction of the facility. Clause 17 creates offences and clause 18 contains definitions relating to the destruction process.
Clauses 19 and 20 provide for the chemicals contained in schedule 1 to the convention to be controlled through the issue of licences. That arrangement will enable the United Kingdom to implement the controls required in part VI of the verification annexe to the convention, which include limiting the overall quantity in the United Kingdom of the most dangerous chemicals to one tonne.

Mr. Dalyell: A brief from the Royal Society of Chemistry, which I think that the Department has received, raises the urgent question of research. The society argues that clauses 19 and 20
would implement the Schedule-1 regime by requiring anyone who would use, produce or possess a Schedule-1 chemical for a permitted purpose (such as pharmacological research) first to obtain a licence from the Government, no matter how small the quantity. Substances that are supertoxic sometimes make super-precise research tools, being valued and used because of it. Here, then, is an instance where the Bill could place significant constraints"—
this is the point that I want to make—
on scientific research, even though research is not an activity expressly covered by the Convention.
I think that that must be answered, although I do not know whether the Royal Society of Chemistry is right.

Mr. Oppenheim: I am in the rather strange, if not perverse, position of being a Minister responsible for deregulation in my Department, while arguing for a higher level of regulation than the hon. Member for Linlithgow (Mr. Dalyell).
I shall do my best to explain. I did receive a fax from the Royal Society of Chemistry—by accident, as it happens: it came through on the wrong fax machine—which raised the issue. I appreciate the society's concern, which I think has some legitimacy. We are happy to talk to the society; but let me explain, as best I can, why we have adopted this course.
The convention makes it crystal clear that when it comes to the most dangerous chemicals—incredibly toxic chemicals—we are limited to one tonne in the United Kingdom, regardless of whether the chemicals are used by Government, industry or academia. We think that the best way of ensuring that we remain within the bounds of the convention that we have signed is to introduce a licensing regime for those most toxic chemicals. I see no honest alternative, although I understand the hon. Gentleman's concern and that of the Royal Society of Chemistry. That is the best answer that I can give the hon. Gentleman.

Mr. Adam Ingrain: I am sure that the Minister did not want to give the impression that the Royal Society of Chemistry had withheld a document from him. The document that he said came through on the wrong fax machine was probably made widely available to those with an interest in the subject. I am sure that the Minister did not intend to cast such a slur on the society.

Mr. Oppenheim: Although we have had extensive consultations with the society—which I must say were extremely valuable and helpful—to the best of my knowledge no one in the Department received the fax. It would have been nice to see a copy, although we knew the nature of the society's concerns. Perhaps a fax was sent, and went astray in the same way as mine. Let me make it clear, however, that we have had very good relations with the society, which has been extremely


helpful both in the drafting of the legislation and during the negotiation phase. We shall always listen to any legitimate concerns that it may have.
Clause 21 of the Bill enables the Secretary of State to obtain information when he suspects that an offence under the Act has been or is about to be committed. The convention requires the UK to make declarations to the Organisation for the Prohibition of Chemical Weapons of its activities in regard to certain chemicals. Clauses 22 and 23 enable the Secretary of State to obtain the necessary information so that those declarations can be made.

Mr. Mike Gapes: Will the Minister give way?

Mr. Oppenheim: I would prefer to continue until the end of my speech. If the hon. Gentleman has a specific query, he can attempt to catch Madam Speaker's eye; alternatively, I will let him intervene in my winding-up speech. I have already given way many times, and I think that I shall have to push on now.
The convention establishes a system of inspections as part of the regime of verifying the prohibition on chemical weapons. The inspections will be undertaken by teams of international inspectors. Clauses 24 to 28 make provision for those inspections to be undertaken in the UK. Clause 25 enables the Secretary of State to authorise inspection teams to exercise those rights; clause 26 creates various offences relating to inspections. Clause 27 confers on the inspection team the privileges and immunities that are required by the convention. Clause 28 enables the Secretary of State to reimburse in relation to the inspected site any expenses that have been incurred during the inspection. Clauses 29 to 31 contain provisions relating to offences, such as powers to enable investigation where an offence is suspected.
Clause 32 provides statutory protection for information that is provided under the Act or the convention. That will be of particular interest to businesses that are concerned about the protection of confidential business information. Clauses 33 to 38 contain a variety of provisions, including provisions that service personnel who commit any of the more serious offences connected to this matter should be tried in a civil court rather than by court martial. A power to amend the Act consequent upon any amendment to the convention is also contained in these clauses. Clause 36 provides that the Bill binds the Crown, subject to certain qualifications. That is in line with the Government's policy on Crown application.
I know that a number of hon. Members want to speak in the debate. If there are any further concerns, I shall do my best to address them in my winding-up speech. It is uncharacteristic for me to be heard in such relative silence during a performance at the Dispatch Box. I wonder if that is a sign of the new consensus. I commend the Bill to the House.

Mr. Adam Ingrain: I make it clear from the outset that the Labour party welcomes the Bill. In many ways it is almost the end of a long road for those who have been campaigning for international control and regulation of chemical weapons. The journey is not yet over because, as the Minister says, 65 nations are still required to sign the convention before it can come into force.
As the Minister said, 42 of the original 159 signatories have ratified the convention to date, and 12 others are completing the necessary legislative process. He also said that it is anticipated that the 65th instrument of ratification will be deposited before the middle of next year or thereabouts, and that the convention will come into force 180 days after the 65 signatory states have ratified the convention and deposited their instruments of ratification with the UN Secretary-General.
I share the Minister's sincere and genuine wish to see the United State and the Russian Federation sign at an early date because they are important in ensuring that other nation states comply with the convention. However, the convention is important not just to the US and to the Russian Federation but to the United Kingdom, which has historically played a positive role in the development and promotion of such international treaties. Therefore, it is obviously important that we become one of the 65 signatory states.
As the Chemical Industries Association said in its briefing for the debate, if the UK fails to be one of the 65 signatory states, that will have a serious effect upon the trade relations of the many UK companies that trade in chemicals. Chemicals are the UK's No. 1 manufacturing export earner, generating a trade surplus in 1994 of some £4.5 billion. In the light of Tuesday's disastrous trade deficit figures, further damage to our manufacturing base will be unacceptable, probably even to the Government and, I suppose, to the Minister, who was heard in silence. There are sound reasons for helping the Bill reach the statute book, but I shall come to some modifications that are still required.
Another important reason why the chemical weapons convention should receive full ratification is that that would have a positive effect and would stimulate the control and elimination of biological weapons. The biological weapons convention of 1972 lacks the necessary verification and compliance procedures to make it effective. When the chemical weapons convention is in force, it will provide a working example to the ad hoc group that is engaged in drafting a possible compliance and verification regime in that area. Ratification of the convention would also have positive implications for other forms of arms control and non-proliferation agreements. For those reasons, the Opposition welcome the Bill. I am sure that the Bill is welcomed by all parties and all hon. Members for the same reasons.
The Scottish National party is always going on about environmental issues—I am perhaps being slightly parochial—and complains about Scotland being a nuclear dustbin. However, I note that the Scottish nationalists have not bothered to turn up for this debate on a major concern not just within the United Kingdom, but internationally. I hope that the SNP supports the Bill, even if it has not done so by its presence. The Opposition support the Bill and I am sure that it will receive the full support of all hon. Members.
The Minister pointed out that the Government signed the convention at the earliest possible date, on 13 January 1993. Nearly three years have elapsed before the introduction of the required legislation. Clearly, the Government were doing something, but they were not taking decisive action. The Foreign Office and the Ministry of Defence were strongly in favour of


introducing the Bill, but for some reason the Department of Trade and Industry has been dragging its feet and has resisted early implementation.
The Foreign Office nearly won the battle in 1993 to put the measure on the statute book at an early date. The Gracious Speech for that year stated:
My Government will work for the effective implementation of the Chemical Weapons Convention".—[Official Report, 18 November 1993; Vol. 233, c. 7.]
Yet no legislation was forthcoming.
In 1994, the Department of Trade and Industry managed to downgrade the commitment, but at least a broad reference remained in the Gracious Speech, which stated:
Preventing the proliferation of weapons of mass destruction remains an important priority."—[Official Report, 16 November 1994; Vol. 250, c. 4.]
However, that priority did not go as far as bringing forward legislation on chemical weapons.
Only in late January 1995 did anything appear—a DTI document entitled "Industry and the Chemical Weapons Convention", which sought the views of users and producers of chemicals. On 19 July, as the Minister said, the Government published the draft Bill, together with a further consultation paper. I do not object to the consultative process, but there was a significant gap between January 1993 and July 1995. Despite that interesting gap, the draft Bill was not well received and, as a result, underwent significant modification on the basis of representations received from industry and experts.
As a result of the representations made, the Bill has grown from 27 to 38 clauses. Even now, some people still question whether the Bill truly conforms with all aspects of the convention. The Minister will also be aware that the delay in publishing the Bill resulted in criticism from the Foreign Affairs Select Committee.

Mr. Oppenheim: The hon. Gentleman said that there is some doubt as to whether the Bill fulfils every aspect of the convention. Could he be more specific about which points cause concern and let us know?

Mr. Ingrain: I shall deal with that question later, and I am sure that other hon. Members will deal with some of those issues.
I have heard that part of the reason for the delay was the insistence of the previous President of the Board of Trade, the right hon. Member for Henley (Mr. Heseltine). His antipathy to any form of regulation of industry, even in weapons control, determined the delay in the publication of the Bill.
The Minister said that it was unusual for him to introduce the Bill because he was known as a deregulator, yet here he is arguing for regulation. Perhaps the Minister has given us the key to why the Department of Trade and Industry delayed the measure, and that is why I believe there is some substance to the argument that the former President of the Board of Trade refused to allow the Bill to come forward while he was in charge of the Department. In refusing, he ignored the international community; he ignored the experts on arms control and chemical weapons; and he ignored the wishes of the

British people, who want to see those weapons of mass destruction disposed of once and for all, and removed from the international stage. He even appeared to ignore the wishes of his ministerial colleagues in the Foreign Office and in the Ministry of Defence. In doing so, he has embarrassed the United Kingdom at international level because we shall ratify the convention long after many of our European partners.
The European Parliament passed a resolution on 17 November which specifically expressed deep concern that the United Kingdom had not yet ratified the convention. There is something wrong when this country, which was one of the earliest signatories and has long had a reputation of campaigning on this front, was so late introducing the Bill. It gives new meaning to the concept of just-in-time management. If the Government had fallen and we were in an election period now, it is possible that we would not have been one of the 65 nation states. That would have been a serious problem for British trading relations.
The Bill has been delayed long enough and the Opposition do not want to cause it any further unnecessary delay. It is important, however, that what we produce from our deliberations is the best possible legislation, and I hope that the Government will be positively responsive to those who are urging that the Bill needs more transparency and accountability measures.
Before moving on to those points in detail, I should like to deal with Department of Trade and Industry as the national authority responsible for the monitoring and implementation of the convention. One of the key elements of the convention document is the need for each signatory state to establish a national authority. That is contained within section VII.4 of the convention. It could be argued that what was required was a stand-alone agency reporting to Parliament through the Department of Trade and Industry. Such an agency would, of itself, have immediately improved the transparency and accountability of the monitoring process.
Will the Minister tell the House whether the Government have considered at any time the establishment of a separate agency and, if not, why not? Will the Minister explain why the words "national authority" do not appear in the Bill? It is probably too late in the day to seek substantial amendment to establish such an agency.

Mr. Oppenheim: We believe that the Department of Trade and Industry is the best organisation to carry this out. If the hon. Gentleman thinks this through seriously, he will see that there are significant national security implications, which would cause problems if the body were to be totally independent. The best assurance of the effectiveness of the body is that, ultimately, it will be responsible to Parliament and Parliament will be the final arbiter. That is the best guarantee of the independence of the body. I think that we have made the best decision, bearing in mind the security implications that must be considered by anyone in government. If the hon. Gentleman thinks that we are wrong, that is fine. We think that we are right. We want to go ahead with the Bill. The hon. Gentleman can give a commitment that if his party is elected, it will change things.
I want to make one further gentle point to the hon. Gentleman. The consultation document was issued last January—almost a year ago. The draft legislation was


issued in July. I have no record of any senior Opposition Member or Front-Bench spokesman writing to us, contacting us or coming to us saying that there should be a totally independent body rather than the Department of Trade and Industry. We all want to get the Bill through as quickly as possible. I should have thought that, if this were a serious concern, the hon. Gentleman and his colleagues would have taken advantage of the lengthy consultation period.

Mr. Ingram: The Minister has extended my point a wee bit. I did not use the phrase "totally independent body". I used the phrase "stand-alone body". I have no objection to it being a next steps agency. That could have been set up quite easily. It would then have had a management structure and reporting mechanisms, which would have been helpful to the monitoring in a whole range of ways. Please do not put words into my mouth; I did not argue for an independent body. As I have said, it is probably too late in the day for us to seek the establishment of such a national authority.
If the process that the Government set in force does not work or does not seem to be in the best interests of national security or in the national or public interest, an incoming Labour Government would consider the best method of monitoring. Any Government would do that. If something does not work, it needs to be fixed.
I am not criticising the civil servants, but we shall end up with seven anonymous members of staff working in the Department of Trade and Industry. That hardly adds up to a genuine attempt by the Government to implement the full spirit of the convention's articles.
Leaving aside that criticism, there are other ways of ensuring that what the Department of Trade and Industry does as a United Kingdom national authority is properly monitored. The Department will be charged with ensuring full compliance of this legislation within the United Kingdom. It will have the responsibility of guarding against any wrongdoing on the part of producers and users of specified chemicals, but that raises the question of who guards the guards. How will we ensure that the public interest is properly protected?
One of the main changes that people have campaigned for since the first and second draft of the Bill were published is a commitment from the Government to produce an annual report. Why wait until the last moment, when we are dealing with the Bill in Parliament, to make that commitment? After all the time that we have had to consider the legislation, why has the Minister waited until tonight to announce that there will be an annual report? He has not specified what the annual report will contain. Will he give us some details?
The public and Parliament should be told for each reporting period the number of companies providing information, the number of chemicals of concern, the details of the chemicals involved, the quantities of chemicals involved and the compliance of companies, that is, how good or otherwise is the information provided by them. The report should detail the number of prosecutions for violations, the number of routine inspections of premises, the number of challenge inspections and an audit of the outcome of inspection of premises. Rather than simply saying that he will produce an annual report, the Minister should specify exactly what the report will contain.

Mr. Robert Key: Give him a chance.

Mr. Ingram:: The Government have had almost three years. That is chance enough to consider the issues. The points that I have raised have been argued not only by the Opposition but by those who have given advice to the Department.

Mr. Gapes: My hon. Friend talks about who guards the guards. I draw his attention to clauses 22 and 23, on which I would have questioned the Minister if I had had the opportunity. Is it not true that those clauses include some draconian powers, including the power to impose imprisonment for two years, serious fines and various other punishments? While those powers may be necessary, it is important that we avoid abuses, such as those that are being investigated by the Scott inquiry, and the use of public interest immunity certificates in ways that could affect innocent people in academic research establishments or industry doing nothing wrong. They could be put into a difficult position by some civil servant or Minister who does not want proper accountability. Can we have an assurance from the Minister on that? Will my hon. Friend comment on the issue?

Mr. Ingram: That is a good point. I was going to comment on that. My hon. Friend has made his own point very well. No Opposition Member would dissent from his analysis of those two clauses. My hon. Friend will recall that the Minister asked me earlier to suggest changes if we thought that anything in the Bill needed to be changed. We are already suggesting changes. We shall see in the Minister's reply whether he is responsive to those suggestions.
Further to my point about greater accountability and transparency in relation to the annual report, I contend that procedures should be put in place to allow Parliament the opportunity to scrutinise the work of the DTI as the national authority. Once it has ratified the convention, the United Kingdom will be required to produce a confidential annual report to the Organisation for the Prohibition of Chemical Weapons in The Hague. I see no reason why the document should not be screened for commercial confidentiality and then presented for consideration to an appropriate scrutiny Committee of the House, such as the Trade and Industry Select Committee. That could be done at the same time as publication of the annual report, to which the Minister referred earlier. Such scrutiny by the House would not place national security at risk. It would show that the United Kingdom was acting in the best way possible to ensure that the convention was properly applied and monitored within the confines of our territory.
Another way of improving transparency would be to set up an advisory body outside the DTI to offer advice on the implementation of the legislation. Such a body would provide a better point of contact for industry, academics and concerned members of the public than civil servants buried away in the deep recesses of the DTI. Such a body already exists for pesticide control. The Advisory Committee on Pesticides is an independent body, the remit of which is to advise Ministers on a range of topics related to pesticide use within the framework of the Food and Environment Protection Act 1985.
In its fifth report in the 1994–95 Session of Parliament, the Agriculture Select Committee commented favourably on the working of the Advisory Committee on Pesticides. If it is deemed necessary to have such a committee to


oversee pesticide use, there is an even greater case for setting up a similar committee to oversee the production and use of potentially dangerous chemicals.
As I understand it, advisory bodies exist to work alongside the Chemical and Biological Defence Establishment at Porton Down. Will the Minister give consideration to building on the role of those advisory bodies and setting up a similar advisory structure to interface with the DTI as the national authority?
I should like to examine the role of the CBDE a little further. As my hon. Friend the Member for Linlithgow (Mr. Dalyell) says, the work of Porton Down is vital to the nation. We have been involved in chemical defence since 1916. For the past four years, the CBDE at Porton has published an excellent annual report about its anti-chemical protection work. Article X.4 of the convention requires that each state party provide information about the nature of its protective work against chemical warfare. The article says:
For the purposes of increasing the transparency of national programmes related to protective purposes, each State Party shall provide annually to the Technical Secretariat information on its programme".
I should like the Minister to elaborate on the envisaged relationship between the CBDE and the Department of Trade and Industry on the implementation of the legislation. As others have said, the establishment at Porton Down is a national asset. It should be used effectively. Will the Minister describe the nature of the advice that the Government will seek from that valuable source in monitoring the DTI's role?
I draw the Minister's attention to the recent annual report of Porton Down. It refers to issues of concern in hazard assessment relating to chemicals and disclosures by scientists in the former Soviet Union—Dr. Mirzayanov and Dr. Uglev. The first disclosure related to a Soviet nerve agent declared as VX. They said that the former Soviet Union had developed and weaponised in binary form a close analogue of VX, code-numbered compound 33. The compound had the same empirical formula as VX, but differed in the substituents around the central phosphorus atom. Historical data on the compound suggest that its properties are broadly comparable to those of VX. The precursors required for its production should fall within the generic structures in the schedules of controlled chemicals in the annexe to the chemical weapons convention.
The second and third disclosures were more disturbing. They related to the development of two novel organophosphorus nerve agents. One was described as being five to eight times more effective than VX as a battlefield agent. The other, an analogue of the second, was said to have been developed as a binary weapon which could be made from industrially available precursors not listed in the chemical weapons convention schedules. I should be grateful if the Minister would confirm that the anxiety raised in the Porton Down annual report has been taken into account and say whether those chemicals are included in the schedule of the Bill that we are considering tonight.
The matter to which I have referred is just one aspect of a detailed report. It highlights the importance of the work undertaken at Porton Down. It also makes the case

for comprehensive annual reports rather than merely something to assuage the criticisms of the Government because of the Minister's non-response to the request for an annual report.
On another point of detail, the Bill gives the Secretary of State significant powers to make regulations to enable his Department to ensure that it complies with the convention. We need to examine how the regulation process will work in practice. Fears have been raised with me by the scientific community about the issue of licences for the use of certain chemicals. Whole families of chemicals—thousands of different compounds—are covered by schedule 1. It is extremely likely that many of them will be regularly used in small quantities in research laboratories. That point has been raised in interventions. Will individual researchers have to apply for a licence each time they use a listed substance? I am not presenting an argument for or against, but I think that it is important that we reach an understanding on how people in research will be expected to respond to the legislation. Will it be the case instead that a research establishment or company will be able to obtain a blanket licence to cover all occasions on which certain chemicals are used? Clarification would be helpful.
There is another concern. How will the appeal procedure work if an organisation or individual fails to obtain a licence for the use or development of a particular chemical substance? A clarification of that issue today would set at rest some of the doubts prevailing.
My hon. Friend the Member for Ilford, South (Mr. Gapes) mentioned clause 23, which states:
The Secretary of State may make regulations requiring persons of any description specified in the regulations to inform him that they are of such a description.
Although that is a wonderful piece of parliamentary draftsmanship, it needs clarification. Will the Minister explain how it will work in practice? How will individuals and especially small companies, in the research sector primarily, become aware of the legislation? That point is particularly important since the Government have given no sign that they are intending to set up an outside body to act as a contact point between themselves and individuals.
Like my hon. Friends, I am concerned that those all-embracing regulations that the Bill empowers the Secretary of State to make will be introduced via a negative statutory instrument, as specified in clause 23. Surely, given the extent of the powers that will be vested in the Secretary of State as a result of that clause, it would be more appropriate if the relevant regulations were subject to affirmative procedure.
I have touched on the need for greater transparency and accountability in the UK implementation of the convention. Another concern is export controls. The Bill bans the transfer of chemical weapons or substances that will be used to manufacture chemical weapons. The result of that is that exporters of substances of potential use in warfare need to show that such substances will not be used for war purposes. I shall paint a scenario that is not unrealistic.
A major UK chemical manufacturer has gone out into the market place and obtained a large order abroad for his goods. Fulfilling that order will be good news for the company and the balance of payments. The substances concerned can be used for the manufacture of chemical weapons, but there is no real proof that they will be. The


DTI could be under very strong pressure not to press the issue further by undertaking stringent checks on the end use of the substances. The Foreign Office may know very little about it.
That scenario is not unrealistic. The Scott inquiry has already shown that such tensions can and do arise. In theory, the UK chemical weapons national authority would ensure that such events never occurred, but the powers of the national authority are vested in the DTI, the very body that has the responsibility to promote exports.
I have already pointed out that relations between the Foreign Office and the DTI can be far from good, as the delay and confusion in bringing forward the Bill has shown. Such poor relations were clearly shown in the Scott inquiry as well, as was pointed out in Monday's edition of The Independent in an article which dealt with a letter from a previous Secretary of State for Trade and Industry. The article went on to say:
A rift had developed between the Foreign Office, which wanted to maintain an embargo not just on arms but also machine tools, which could be adapted for use in the manufacture of arms, and the DTI, which feared that the machine tool ban would wreck British trade relations with Iraq.
If we substitute "chemicals with warfare potential" for "machine tools", my point is clearly made.
Will the Minister furnish the House with a detailed description of the links between the DTI, the Foreign Office and Customs and Excise with regard to the way in which they will deal with the export of chemicals as a result of the Bill? Who will have the final say in resolving such conflicts—the DTI, the DTI's national authority, the Foreign Office, the Ministry of Defence or some other Government agency?
We must ensure that the circumstances which led to the Scott inquiry are not repeated when potentially dangerous chemicals are concerned. Clear guidelines need to be drawn up to ensure that the chemical weapons convention is not subverted by decision or default.
We do not want to obstruct the UK ratification of the chemical weapons convention. We deplore the delay that has occurred so far because of Government inaction and hesitancy. Nor, however, do we want to wave the Bill through if improvements can be made—even at this late stage. The experience of the chemical weapons convention will be drawn on when other forms of arms control are introduced in future—not least with regard to biological weapons.
We firmly believe that the Bill can be significantly improved by increasing the accountability and transparency of the UK national authority. That would have beneficial consequences for international relations and arms control. That point of view is of course supported by the Royal Society of Chemistry and other experts.
I shall listen carefully to the Minister's winding-up speech. I hope that he will address the points that I have raised regarding the need for a free-standing advisory body, and deal with the details raised, not only by myself but by my hon. Friends in interventions, on the appeal mechanism, on licence applications, and on other matters. I shall also listen with interest to how the Minister intends to avoid a repeat of the Iraqi machine tools scandal in which his Government are so inextricably linked. We await the report with interest.

Mr. Michael Jopling: I guess that it is probably too much to hope that the Bill will get very much publicity or arouse much interest, but to me the Bill is one of the most vital of this Session. I am sorry that the Under-Secretary is not listening at the minute to what I want to say—now I think that I have his attention. The only comment that I would make about the Bill is that it is better late than never.
I am a member of the Foreign Affairs Select Committee, as is the hon. Member for East Kilbride (Mr. Ingram). He and I were both signatories to the recommendations of that Committee, which said that the Bill should have been introduced in the last Session. That was my view and it still is. I would have much preferred the Foreign Office to sponsor the Bill rather than the Department of Trade and Industry, and I much regret the delays—which I know have been due to the DTI—in spite of the chivvying that the Select Committee gave the Foreign Office. We always knew that it would be a DTI Bill. Britain should have been at the very forefront of ratifying the convention and bringing such a Bill forward.
I hope that the predictions are true that we will be among the first 65 nations to ratify the convention. If we are not, it would mean, as the Select Committee said:
few, if any, United Kingdom nationals would be employed as Inspectors or in the Technical Secretariat, at any rate in the first instance".
It is hugely important that whatever is done with regard to the verification is done by the best possible and best-informed officials; therefore, I cannot but stress the urgency of doing everything possible for the world community to control as best we can the existence and the spread of chemical and biological weaponry.
Chemical and biological weapons are hideous enough when used by military forces, when troops are usually trained in dealing with their hazards. What concerns me even more is the possibility of even more hideous implications if those dreadful weapons get into the hands of terrorists. Strikes could be made against totally unprepared and innocent civilians. There are many thousands of civilians in Iraq and Iran who have learned to their cost and pain the horrible implications of those weapons. Those weapons have rightly been described as poor men's nuclear weapons, and so they are.
We have at last been presented with the Chemical Weapons Bill. I suppose that it could be described as the world community's best effort so far to control chemical weapons. In my view, it should be given our absolutely unequivocal support. I say again, however, that the main problems with the Bill will be in verifying the existence of these weapons and the components that go into manufacturing them.
I have heard it said in the Pentagon, in Washington, that the total control of chemical weapons is impossible to achieve. I believe that that is true. We should recognise, however, that this is the world community's best effort so far to control such devices, and we must be satisfied that it is the best possible compromise to date.
I hope that the Minister will tell us that there will be no complacency about our having got this far. It is essential that efforts continue to be made to tighten those aspects where proper control cannot be achieved, as the Pentagon has said. We must close those loopholes as


quickly as possible. It is vital that intrusive challenge inspections are carried out and are not hindered around the world in order to do our best to have as few of those loopholes as possible.
I am concerned about those delays, and I hope that the Minister will tell us what their effect and that of the consultation will be on industry. I should tell the House that I am a director of a company in the chemical industry. I have never been told that it has been involved in nuclear weapons, but I suspect that what I am now going to say will not be very welcome to the chemical industry as a whole. I hope that in preparing this legislation and in undertaking consultation no short cuts have been taken at all—I do not care who is hurt by that—in getting the best possible level of verification and control of these weapons.
As I said, I regard the menace and the threat from chemical weapons in the hands of terrorists as one of the most crucial and worrying things that confronts us in the world today. Therefore, I would be absolutely opposed to short cuts being taken and to our creating more loopholes in the verification than we need have done. I hope that when the Minister comes to respond he will tell us that no short cuts have been taken and that we are confronted with a control system that has the fewest possible loopholes. If that is not the case, we proceed at our peril.

Mr. Tam Dalyell: As one who has been interested in chemical weapons issues for three decades, I welcome the Bill, and in particular the degree to which the Department of Trade and Industry has consulted on and reflected the views of those of us who were worried that, above all, it did not have sufficient powers. My judgment is that the Bill can discharge Britain's obligations under the convention, perhaps with the comparatively small exception of the important component of transparency.
What is missing is perhaps a small item, but it is part of a bigger issue—a statutory annual report. I welcome what we could call the change of heart decision to have an annual report, but I must ask the Minister whether it is to be statutory. The Minister and his officials, as well as Members of Parliament, appreciate that it is an important part of the argument. I hope that he will say in his winding-up speech whether it is to be statutory.
How, in fact, is the House of Commons going to hold the authorities to account? If there is an annual report, the truth is that those who might be critical can give it to their expert friends. That in itself is a good discipline. I emphasise, however, that the annual report's nature, statutory or otherwise, is absolutely crucial.
There remains an industry problem, and that is why I intervened during the Minister's speech. The dual uses of chemicals-—military and non-military—are intertwined. We should hear more in Committee about the problems of commercial secrecy because it is a rather delicate issue. It is vital that the treaty should keep abreast of scientific and technological change and innovation. One example is the new Russian development of Novichoks, an agent of GP.
I want to be clear about Porton Down. I know that the hon. Member for Salisbury (Mr. Key), who may speak later, represents Porton. I hope that he will agree that the

issue of Porton is very important to the nation and has implications beyond his constituency and that he will therefore excuse me for referring to it. Intertwined with the future of chemical warfare disarmament is the future of the Porton Down establishment, which is a most valuable national asset, as my hon. Friend the Member for East Kilbride (Mr. Ingram) said.
Britain got rid of its chemical weapons in the 1950s so Porton today is, frankly, protective. It exists to ensure that Britain's defences against chemical and biological weapons keep up with new threats and new opportunities, including ones that stem from scientific discovery and technological development. By that same token, Porton has much to contribute to the well-being of the chemical weapons convention. The Bill does not reflect that as clearly as it could.
For example, unless the DTI, which is charged with implementing the convention in the United Kingdom, can count on Porton's assistance, it is likely to be ignorant of how new science and technology are or ought to be affecting its work. It will be in no position to push the treaty's international authority into any adaptation made necessary by technical change—amending the lists of the controlled chemicals and introducing novel inspection techniques—which will certainly be necessary. Yet where is the assurance that Porton, which today is one element of a next steps agency, will in future be able to provide such crucial help to protect this whole enterprise from obsolescence? It is in the recollection of the Department of Health that I went on a delegation with some colleagues to discuss the future of Porton last year; I realise that this is a multi-Department problem.
Porton, frankly, does not have a very good image. I am bound to say in parentheses that it is part of my particular history. I got into trouble in a celebrated privilege case back in 1967 for having talked too freely to Mr. Lawrence Marks of The Observer—not that I thought that I was doing anything wrong; I did not realise that the Select Committee report which had been printed had not gone through the sidelining process. I also add parenthetically that I learnt later from the late Sir Harry Legge-Bourke that, in fact, officials at the Ministry of Defence to whom I had been an extreme nuisance on other matters, such as Aldabra atoll and variable geometry aircraft, thought that technically I was in the wrong; there was, therefore, an opportunity to suggest to certain hon. Members that they might raise it as a privilege case. Those events occurred a long time ago. I mention them because I might be considered an automatic critic of Porton Down: on the contrary, I think that it is rather important to the nation.
If one were speculating about the most likely venue for clandestine chemical weapons work in the United Kingdom, Porton Down could hardly fail to be near the top of the list. Its association with implementing the convention might seem to call the work of the implementers into disrepute. That is why we must introduce a transparency mechanism that would display the real beneficial and indispensable nature of Porton Down's involvement.
For that reason also, we must give serious thought to adding certain requirements to the Bill. There must be an obligation on the Secretary of State—possibly aided by an advisory board, as my hon. Friend the Member for East Kilbride suggested—to lay before Parliament each year a


report on the operation of the convention in the United Kingdom, including an account of efforts made to stay abreast of all relevant areas of technical change.
Paragraph 4 of article X of the treaty requires that there be an annual report on programmes related to protected purposes, but I cannot find any such requirement in the Bill. Where are the powers that would enable the Secretary of State to provide that report? It may be easy for the Minister to assure us on that point during his winding-up speech. Like my hon. Friends, I do not want Britain to incur penalties for late accession to the convention. Therefore, I shall be as helpful as I can during the Committee stage, provided that Ministers participate fully in the process.
I have two other concerns. First, when discussing the future of Porton Down, it is necessary to reach some conclusion about international problems—particularly the situation in Iraq. Madam Deputy Speaker, if I stray too far on that subject I am sure that you will remind me that I am to raise the issue of sanctions against Libya and Iraq on the Adjournment on Wednesday night. That is probably the more appropriate time to discuss such matters.
Tonight, I simply refer to the fact that various media circles have recently reported allegations that chemical weapons or materials are present on the vessels that sank during the military operations in January and February 1991 in the Shatt al-Arab and along Iraq's gulf coastline. The Iraqis insist that their vessels which sank at that time carried no chemical weapons or materials. They are ready to co-operate with the United Nations if it wishes to salvage the sunken vessels in order to ascertain their contents, and they are willing to provide the facilities required for such an operation.
I visited Baghdad two years ago—not everyone approved of my trip)—and I believe that sanctions should be lifted. But that is by the by. Whatever views we have about Iraq, we must appreciate the importance of a monitoring system—and our monitoring system is Porton Down.
I am also concerned about the unanswered question in the brief from the Royal Society of Chemistry. We have not addressed the impact of the legislation on scientific research. I interrupted the Minister to discuss clauses 19 and 20, but it is not immediately clear from the available data whether research chemists, bio-chemists and associated scientists will suffer seriously as a result of the regime. The requirement to obtain a Government permit before embarking on a particular laboratory synthesis or other study will be strange to many scientists.
The Bill leaves the question of appeals against disallowed licenses to the secondary legislation—or, more particularly, to an order made by statutory instrument, which is subject only to annulment by Parliament. The list of chemicals in schedule 1 to the Bill is not as short as it looks. The list contains only 12 entries, but five of them are generic, not specific, so as to prevent would-be violaters from designing molecules around the chemicals ban. Those five families encompass many thousands of different chemicals.
It is important for Britain to sign the convention as soon as possible. If we are not quick about it—I think that we should probably sign the convention before Christmas— our scientists, who are among the best qualified on the planet, may be excluded from jobs in this area. That

would be a great pity for Britain and for other countries too, because I suspect that we are as good as, if not better than, anyone else in this field. Secondly, we must be very clear about the Bill's on-going impact on industry.
I accept that the dual-purpose problem may evolve in unexpected forms. Therefore, it is important to ensure the establishment of a proper monitoring system. I do not pretend for a moment that the House of Commons is qualified to conduct that monitoring; but hon. Members have a duty to ensure that a statutory annual report is produced which may then be passed on to those who know far more about the matter.
I pay tribute to the advice that I have received over the years from Dr. Julian Perry Robinson, who has assisted many hon. Members, regardless of their political persuasion. I also thank Dr. Stephen Benn of the Royal Society of Chemistry. It is very important that all the relevant information is available to those working in the field. They may or may not be potential critics, but at least we shall all know what is going on.

Mr. Robert Key: I begin by declaring several interests to the House. First, I am very pleased to see that my hon. Friend the Under-Secretary of State for Trade and Industry, the Member for Amber Valley (Mr. Oppenheim), is in charge of the Chemical Weapons Bill. I had the great pleasure of teaching him his A-levels some years ago. I got on my bike and left the Front Bench, but I am delighted to see him there today and I congratulate him on his achievement in putting the Bill together. I hope that it will enjoy a speedy passage through the House.
Secondly, I reiterate what is already recorded in the Register of Members' Interest: I am connected with a company called Hortichem, which helps our lettuces to grow better and ensures that our top fruit is better than the French varieties. The company is involved entirely with horticultural chemicals and I have done my best to ascertain that it has nothing whatever to do with the schedules that appear at the back of the Bill. However, I declare my interest to the House just in case.
Thirdly, I have enormous pride in declaring my interest as the Member of Parliament representing Porton Down and both establishments there. Today we are discussing only the Chemical and Biological Defence Establishment, which employs 620 wonderful people. They form part of this country's important scientific base and they have helped to put us at the forefront of the field internationally. We should also mention the support staff, without whom the facility could not operate. They are crucial members of my constituency community and I am proud to represent them.
When I became the Member of Parliament for Salisbury in 1983 my predecessor, Sir Michael Hamilton, destroyed his files, leaving me only two: one on Stonehenge, and one on Porton Down and the reorganisation that the Porton Down communities had endured over the past 30 years.
I welcome the support that the hon. Member for Linlithgow (Mr. Dalyell) gave to Porton Down. He asked what would safeguard Porton Down, and I can best answer that question by reminding him of the 620 employees at Porton Down who are indispensable to the future well-being of our nation's defence and to that of


the international community. During the past 12 years, they have taken the trouble to educate their Member of Parliament pretty thoroughly about operations at Porton Down. I thank the Ministry of Defence and the Department of Health for allowing me the degree of access to that facility that I have enjoyed over the years.
The Bill was introduced jointly by the Secretary of State for Trade and Industry, the Foreign and Commonwealth Office and the Ministry of Defence. My right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) was absolutely right. The Bill has much wider significance than might at first appear, and I share his view that it is one of the most important Bills before the House this Session.
The staff at the Chemical and Biological Defence Establishment at Porton Down welcome the Chemical Weapons Convention as an important part in the web of measures which includes export controls and chemical defence equipment designed to deter the use of chemical weapons worldwide.
The mission of the CBDE has already been described by a number of Members, but the context within which the Bill is now before the House is not so widely appreciated. The threat of chemical and biological weapons is not a specific issue involving a number of chemical substances in the schedule to a particular Bill; it is a spectrum ranging from the classic warfare agents that we have heard about, such as first world war mustard gases, nerve agents and cyanide, through agricultural and pharmaceutical chemicals to bioregulators, toxins and biological agents such as bacteria, rickettsia and viruses— the designer molecules about which we have been hearing. So Porton Down has a huge amount of work, not only looking forward, but also looking backwards, as the hon. Member for East Kilbride (Mr. Ingram) well knows.
It was no accident that the Gulf war benefited considerably from the work of the CBDE. The Defence Select Committee recently produced a report on Gulf war syndrome. In all the froth that flows from such reports, perhaps we lost sight of the fact that we totally endorsed the Ministry of Defence in providing NAPS—nerve agent pre-treatment sets—tablets and inoculations and that any quarrel we had concerned the methodology and after-care involved. That work was carried out at the CBDE. The scientists there were right to do what they did, and without that work we would have been worse placed.
It is a supreme irony that however well equipped and trained a nation's troops are and wherever in the world they are fighting, they can be wiped out by a whiff of a chemical or biological agent. That is why chemical defence is so important; it is all part of deterrence.
The work at Porton Down is probably as important as any other part of the nation's deterrence, including its nuclear capability, and the Government recognise that. I refer the House to the comments of my right hon. Friend the Secretary of State for Defence in his excellent speech to the Tri-Service conference earlier this month:
Our concept of security in 2010 will undoubtedly be broader than that which dominated our thinking and posture for the 45 years which followed the end of World War II. As Sir Michael Howard memorably described it, we are emerging from the rigidities of the Cold War. We will see, and have to respond to, a much more diverse range of challenges: terrorism; weapons proliferation, including weapons of mass destruction; competition over natural resources; religious and ethnic disputes; drugs; organised crime; and refugees.

We also saw quite recently in Japan the terror that the threat of chemical weapons can create on a major city's underground transport system. I have every confidence that our nation will have planned for such a civil event should it happen in Britain. I suspect that that is not the case in some other countries. Such issues now mean that the Secretary of State for Defence has wider responsibilities. Perhaps we should also hear from the Home Office during the passage of the Bill.
A number of Members have referred to what the CBDE has or has not done. It is important to remember that its connection with the Bill goes back a long way. The CBDE has been working closely with the Ministry of Defence proliferation and arms control secretariat and in co-operation with the Foreign and Commonwealth office to support the preparatory commission for the Organisation of the Prohibition of Chemical Weapons, the international body established to implement the convention. The CBDE has sent technical representatives from Porton Down to the experts group and specialist task forces in The Hague working on establishing the structure of the OPCW and developing the technical and administrative requirements in preparation for the convention's entry into force. In other words, my constituents have been at the base of the entire international effort. It is indeed the world's best effort and many of my constituents have helped to make it possible.
My right hon. Friend the Deputy Prime Minister appears to have come under fire from the Opposition Front Bench. That is rather unfair. Page 7 of the annual report of the CBDE for 1994–95, to which a number of Members have referred, makes it pretty clear that the CBDE has encountered some difficulty in moving forward sufficiently fast. It states:
CBDE has now completed collation of the information needed for the UK declaration of former chemical weapons related activities required by the CWC. Preparation of declarations of present activities has commenced. These activities include details of the United Kingdom Single Small Scale Facility sited at CBDE where small quantities of chemical weapons agents to be used for permitted purposes may be prepared and details of destruction of old CW munitions which are occasionally found at various UK sites as well as on the Range at CBDE.".
The CBDE has made a major effort to prepare for the legislation and it is not accurate to blame my right hon. Friend the Deputy Prime Minister, a former Secretary of State for Trade and Industry, for the delay. It means simply that we have been doing our homework better than other nations might have done and that was correct.
It is important that MOD units around the country and their facilities are fully prepared for the challenge inspections that are planned under the legislation. Accordingly, the CBDE has taken part in the United Kingdom series of practice challenge inspections. It has also provided lecturers to assist in the Dutch-sponsored pilot training courses for inspectors and national authority personnel from all over the world.
The CBDE has developed, produced and had certified a toxic material transport container which will make an important practical contribution to the safe transport of samples taken by OPCW inspectors. In the aftermath of the Sarin attack in Tokyo, I recall seeing on television people carrying extraordinary jars of substances. I am delighted that the CBDE has taken matters further.
Airlines have strict rules governing the transport of hazardous materials and the new container has been designed to provide compliance with all existing


packaging criteria. It has now been granted a certificate of packaging issued on behalf of the Department of Transport, the Civil Aviation Authority and the Health and Safety Executive. A container with small samples was taken from London Heathrow to Washington Dulles on 15 February this year in co-operation with the US Army Edgewood research development and engineering center.
A number of Opposition Members referred to Iraq and of course the international effort there depended almost entirely on the work at Porton Down. I pay tribute to the hon. Member for Linlithgow for recognising the importance of that work.
As for the continuing question of hazard assessment, I should underline to my hon. Friend the Minister how important it is that we do not stop now. We are at the start of a process that will continue into the future.
Reference has been made to the Soviet disclosures of the nerve agent VX. The hon. Member for East Kilbride was absolutely right to refer to that and other disclosures. If I may pre-empt my hon. Friend the Minister, the answer to his question is quite simple. It is exactly why the CBDE argues that it must continue to research those products. That means looking backwards as well as forwards.
It is ironic that the chemical substances originally used and stockpiled in large numbers in the first world war— and still stockpiled in large numbers, particularly in Russia—were produced because they had a stable existence and a long storage life. Now that we can make designer products very quickly, the most popular chemicals are the very ones that were previously rejected. The CBDE is going back in time to look at things rejected in the 1950s and 1960s, to make sure that we have not missed a single trick in Britain's effort to ensure a slowing, if not cessation, of a wicked trade.
I read the compliance cost assessment produced by my hon. Friend's Department, for which I am grateful to him, but was alarmed by the cost to British industry. I was relieved when I read the details and realised that we are talking about a small number of firms and small commitments by them. Nevertheless, compliance is a burden on British industry and my hon. Friend the Minister should not for one moment blush at being a deregulation Minister who finds himself imposing regulations. Perhaps the firms have been operating under the wrong regulations and that while we have been too obsessed with implementing ridiculous regulations from Brussels all these years, our eye has not been on the ball. Let us abolish a few more regulations from Brussels and make sure that we enforce by regulation things that matter. I urge my hon. Friend not to be embarrassed. He was never embarrassed even when I was teaching him A-level economics, so I do not imagine that he is embarrassed now. As my right hon. Friend the Member for Westmorland and Lonsdale said, we must get it absolutely right and not waste any effort in ensuring security and safety.
One point that worries me about the compliance cost assessment appears in paragraph 20, which deals with the small business litmus test and mentions thresholds below which declarations and inspections are not required. I seek an explanation and an assurance because it seems strange that whereas medium and large firms will, rightly, have to go to a great deal of trouble, small firms will not have to bother. I find that extraordinary and ask my hon. Friend to re-examine that aspect. I suspect that we shall need to be reassured.
The same point applies to academia. As a former member of the Medical Research Council, I yield to none in my admiration for British science. I entirely understand the arguments made by the academic community, but it should recognise that it is also a target for terrorism as much as anything else and is a source of potential materials for terrorism. The scientific community should wish for the tightest security possible and records of substances, and I am sure that it will. I wish the Bill well and assure my hon. Friend the Minister that it has my strong support.

Mr. Nick Harvey: I am grateful for the opportunity to take part in the debate because, like the hon. Member for Salisbury (Mr. Key), I think that this is one of the most important pieces of legislation that will come before Parliament this Session. I welcome the Bill but share the view of hon. Members who said that it is rather belated. It is none the less welcome that the Government recognise the contribution that the treaty can make to global security. Its ratification is essential. No right hon. or hon. Member can doubt the Bill's validity and we must progress it as quickly as we can. If we fail to pass this primary legislation promptly and by the time the treaty is in force there would be unfortunate consequences throughout the country, as the hon. Member for Linlithgow (Mr. Dalyell) said. There is much of merit in the Bill and I join other hon. Members on both sides of the House in urging that we get on with the job.
There are problems with the Bill as it stands which may cause difficulties in its practical implementation. It would be a shame not to use the limited opportunities at our disposal to address those concerns. Right hon. and hon. Members spoke of how the Bill will impinge on the activities of the scientific community. Clauses 19 and 20 require anyone using, producing or possessing schedule-1 chemicals to obtain a licence first, and I would like to hear how that would work in practice. I presume that the Department of Trade and Industry, as the national authority, will issue licences—but who will decide what is or is not acceptable research? Will there be any form of appeal against licence refusal? Who will advise the DTI? Those questions have no obvious answers in the Bill, but perhaps the Government have replies ready. Many Bills in recent years have given various Secretaries of State sweeping powers. In this instance, hon. Members have not been circulated with the customary tomes of explanatory notes saying how the Bill's powers will be used in practice.
I welcome the fact that the national authority will be given sufficient powers to monitor the data reporting scheme for schedule 2 and 3 chemicals. That system will work well given full co-operation by the industry. There are further powers to implement a full-blown national compliance monitoring system if that is deemed necessary. That would apply to all areas of chemical-related activity, whether or not they are governmental. That measure seems somewhat draconian but presumably it will be used sparingly. The system will rely on close co-operation, which is just as well given that the Bill envisages only seven additional departmental staff in the DTI—presumably in the newly established secretariat. One assumes that other DTI staff will be redeployed on that task.
The hon. Member for Ilford, South (Mr. Gapes) rightly referred to as draconian, if they were used inappropriately, some of the powers in clauses 22 and 23. Clause 23 seems to give the Secretary of State the power to make regulations that will require persons to identify themselves to him if it is likely that the Secretary of State will need information from them. That is like the police requiring criminals to make themselves known. If the Secretary of State is unable to identify the persons in question and their activities, there will be a problem. We cannot be sure that persons will know about the legislation and the requirement to make themselves known.
We should be wary of establishing a system that might result in too cosy a relationship between the industry and the DTI as the national authority, if that brought any risk of endangering our international credibility. It is not clear from the Bill how the DTI's strategies for prevention, accountability, parliamentary involvement and statutory independence will work. The solution must be measures to ensure transparency and accountability. I welcome the Minister's announcement today that there will be an annual report, but share the concern of the hon. Member for Linlithgow that it should be statutory. I would like that requirement in the Bill. We accept the sincerity of the Minister's assurances, but there will come a time when he is long gone and forgotten from his current post. It would be preferable to see in the Bill a procedure for ensuring that annual reporting continues indefinitely. The Australian solution for fulfilling the terms of the treaty is to prescribe that an annual report be laid before each House of Parliament.
Transparency in protecting against chemical weapons is specifically covered by the convention. Although one recognises the necessity for continuing research in anti-chemical protection such as clothing alarms and antidotes, such research may conceal illegal weapons activity, so each country must present its annual report to the Organisation for the Prohibition of Chemical Weapons. Britain's present research, as the hon. Member for Salisbury explained, is undertaken at Porton Down, which already produces an annual report. Will that report continue in its current form? What will be the relationship between Porton Down's report, that which will be made annually to the OPCW and the report to which the Minister referred at the start of his speech? Who will take responsibility for producing the annual report to the OPCW? Does the Minister believe that the Porton Down report will form the basis and that it will be enough to satisfy the treaty's requirements?
As many hon. Members have said, Porton Down will continue to play an important role in satisfying Britain's obligations when the treaty comes into force. It is crucial to ensure that this country is kept abreast of technological development in the chemical industry so that new and potentially dangerous chemicals or new ways of using existing chemicals can be brought under the remit of the treaty. We cannot rely solely on the OPCW to monitor those developments. Porton Down seems to be the only organisation capable of taking on that responsibility. The DTI appeared to recognise that in the discussion document it produced earlier this year when it called on Porton Down to monitor scientific developments.
At that time, Porton Down was a free-standing next steps agency, with a director general who was accountable to Parliament. It now has a managing director and is simply

one of several components of the Defence Research Agency that operates as a trading fund. How will it effect Porton Down's role in the future when the treaty comes into force? We hope that it will continue to monitor technical changes in the chemical industry as effectively for the purposes of bringing new technology under the terms of the treaty as it will presumably monitor technical change for its military and business customers. We can hope, but we cannot be sure because of the uncertainty about the accountability of Porton Down to Parliament. The only way to guarantee that a blind eye is not turned to potential abuse is to enact statutory legislation to ensure transparency and accountability. It should not be too difficult to adapt the existing advisory committees at Porton Down to the requirements of the treaty.
The fact that, unlike in many other countries the Government here propose to operate the national authority from within the recesses of the DTI, may be seen as exacerbating the problems of transparency. There seems little doubt that a stand-alone agency would have been more easily held to account and its activities could have been more easily scrutinised. If the DTI is to publish an annual report, I hope that it will be regularly debated in Parliament so that the transparency is ensured.
There is a need for an advisory board. Organisations that carry out similar functions in other sectors of industry have advisory boards, and I should be interested to hear the Minister's response to the questions that have been asked on that subject. If, as the Bill progresses, further measures are considered which tackle the problem of transparency and accountability, the Bill will be able to do the job asked of it. We shall co-operate with other hon. Members to ensure that the Bill's passage through the House is as swift as possible.

Sir Peter Emery: I can probably claim to be as concerned at an early stage with the need for a chemical weapons treaty as anyone in the House as I am one of Parliament's representatives in the North Atlantic Assembly. Since 1982, the assembly's Science and Technical Committee has been pressing hard for the introduction of a chemical weapons treaty and two of its reports were written by the right hon. Member for Honiton.
The successful negotiation of the chemical weapons convention is a remarkable achievement—perhaps some of us do not underline that enough. The convention is the most ambitious multilateral arms control agreement ever. It seeks a global ban on an entire class of weaponry and will require verification in one of the world's most pervasive industrial sectors.
The entry into force of the convention now seems assured as it has received support from the United Nations and, generally, throughout the world. But there is a need, which has not been emphasised in the debate, to persuade those nations that may covertly possess chemical weapons to join the convention. It may be appropriate for us to examine harshly parties that do not join the convention.
One of the key implementation problems is to ensure that the convention is signed. It is particularly important for nations that are believed to possess chemical weapons to be brought into the convention. Some nations that are unhappy about what they see as excessively intrusive verification may be reluctant to sign the convention. For


example, some Arab nations have suggested on several occasions that they would be reluctant to sign a chemical weapons agreement unless Israel dismantled its nuclear weapons capability. There are various difficulties involved in gaining world acceptance of the convention. That is why I am asking my hon. Friend the Minister whether any consideration has been given to what steps may be taken—even half steps such as trading sanctions—against those who are apparently unwilling to sign the convention once it is in force. The nations that sign the chemical weapons convention should consider that issue. I hope that my hon. Friend is pressing for the relevant sites in this country to be declared as soon as possible, to enable the preparatory commission to determine the scale of the resources needed by the international Organisation for the Prohibition of Chemical Weapons. We should urge all signatories to do that, so that we can proceed quickly.
Many people may think that chemical weapons are a modern problem, but that is not so. Chemical warfare dates back to antiquity. In the Peloponnesian war in 431 BC, Spartan forces used giant bellows filled with pitch, charcoal and sulphur to blow choking smoke into the besieged cities of Platea and Delium. Several centuries later, the Byzantine empire developed what was known as Greek fire, which was a flame-throwing device that produced sulphur dioxide—a binding and choking smoke. In 1456, the defenders of Belgrade used a gas containing arsenic against the Turks. An Australian observer at the time described the effect as murderous and said that the weapon should never be used against Christians. The use of shells containing chloride gas was considered in the American civil war.
When we consider the history of banning, we see that as early as 1899, efforts were made at the first Hague conference to discuss arms limitation and the settlement of international disputes.

Mr. Dalyell: Did the right hon. Gentleman say that there was an Australian observer in 1456?

Sir Peter Emery: I do apologise—I meant to say an Austrian observer. I do not know whether I slipped up or the hon. Gentleman misheard me, but 1456 was a little before the wallabies.
As early as 1899, the Russians proposed a ban on projectiles containing asphyxiating and deleterious gases. The United States opposed it, and it is interesting to consider its reason for doing so. The Americans opposed the ban in the belief that gas was probably a more humane means of warfare than bullets and shells and might be a weapon to achieve decisive results. As a result, the Russian proposal was not adopted.
The widespread use of chemical weapons in the first world war led to the only existing protocol on chemical weapons, created in 1925 in Geneva. It has a long title: the "Protocol for the Prohibition of the Use in War of Asphyxiating, Poisonous or other Gases and all Analogous Liquids, Materials or Devices and of Bacteriological Methods of Warfare". That is still an international treaty, but unfortunately it fell short of banning chemical weapons. It represents an international legal position on the first use of chemical weapons, but it does not outlaw the development, production or stockpiling of chemical weapons. The treaty and the Bill that we are now discussing achieve that end. Several

agents were developed at the end of the last war, notably nerve agents in Germany and the even more lethal nerve gases in the United Kingdom.
It was in 1980, at the Geneva conference on disarmament, when negotiations began to produce a more effective arms control agreement governing chemical weapons. It was during the 1980s that many of us—some in the House, some in the North Atlantic Assembly and some in the United Nations—were pressing for efforts to be made to produce a bilateral chemical arms control agreement. It was the United States and the Soviet Union that achieved such an agreement. In 1989, the Soviet Union announced that it would begin destroying its stocks without waiting for a treaty to be signed. The United States then decided to halt production of binary chemical weapons. In the same year, in Paris, 149 nations pledged not to use chemical agents in warfare and called for their eventual elimination.
It is interesting, even before the treaty is in operation, that in 1990 the United States and the Soviet Union reached an agreement on chemical weapons under which they would begin to destroy 80 per cent. of their stocks immediately and would reduce remaining stocks to 1 or 2 per cent. of the existing total after the signing of the convention. There are occasions when the Soviets and the Americans are blamed for whatever, but in this instance it is unfair not to give them some credit.
There are certain problems when it comes to the need in haste to adopt the convention. I understand that we shall consider the Bill on Report, followed by Third Reading, the week after next. I am glad that the Government have responded to those who are urging that we should act quickly. What steps have my hon. Friend the Minister and his Department taken to try to prepare a list of scientists and British civil servants, or business people, who might work in The Hague under the preparatory convention? I agree entirely with Opposition Members and my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), who have urged that there should be a British input into the proposed administration. I understand that it is estimated that between 700 and 2,500 persons will be involved. The number will depend on the number of signatories and on the number of sites that will have to be inspected or may be inspected.
No one has talked about money, but we must ensure that there is proper finance, so that the administration at The Hague can inspect fully and properly without having to worry about finance. It should be remembered that the International Atomic Energy Agency in Vienna has had no increase in funding for seven years, which has led to considerable worries about the way in which it can carry out its operations. I do not want to see the same situation at The Hague.
Successful negotiation of the chemical weapons convention will be a milestone in the history of arms control. The steps that we are now taking move us forward and make us part of an historical achievement. I am delighted that we are making progress.

Mr. Harry Cohen: I thank the right hon. Member for Honiton (Sir P. Emery) for his interesting history lesson. His slip of the tongue enables me to refer to Australia, which is opposed to chemical weapons and


to French nuclear tests in the Pacific, as we should be. The right hon. Gentleman presented me with an opportunity to make that point.
The Minister may have had his tongue in his cheek when he referred to "rapid ratification" by the Government. We should be asking why there has been such delay in introducing the Bill. It is long overdue. The text of the convention was agreed in late 1992. We should examine the reasons for delayed ratification. The Deputy Prime Minister, the then President of the Board of Trade, dragged his feet. Deregulation and privatisation of the Post Office was deemed more important by the right hon. Gentleman than a major international treaty to ban chemical weapons world wide. That is a clear example that members of the Tory party have become little Englanders.
It is vital that the United Kingdom should be among the first 65 to ratify the convention, not least because that will safeguard the jobs of Britons who have already secured employment with the international organisation at The Hague. Early ratification will also give us good standing in the decision-making processes that are being established. It will show additionally that we are keen on controlling chemical weapons.
The convention will come into force 180 days after 65 countries have ratified it. As the Minister said, we look to the United States and the Russian Federation to ratify it. Once the United Kingdom has ratified the convention, we shall be in a better position to urge those two major powers to respond quickly. That is why early ratification is important. The United Kingdom would have been seen as keener if we had ratified the convention earlier. The Government should be criticised for their tardiness.
I have taken a special interest in chemical weapons for many years. It is an interest that was given renewed vigour after the terrible bombing of Halabja by Saddam Hussein in 1988. Soon after that bombing, I went with my hon. Friend the Member for Islington, North (Mr. Corbyn) to meet the right hon. Member for Bristol, West (Mr. Waldegrave), who was then Minister of State, Foreign and Commonwealth Office, to press for the Government, who had international obligations, to act immediately. History records that no action was forthcoming. That is to the eternal shame of the nation. We remained a full trading partner with Iraq. We did not even impose sanctions. As the Scott inquiry has already revealed, export control guidelines were being slackened. It was a shameful episode as Ministers turned a blind eye to murder by means of chemical weapons.
Under the convention, we shall be obliged not to assist any country to acquire a chemical weapons capability. That means that we need a proper export control regime. The current procedure is a farce because it is subject to the whim of political masters. The Scott inquiry has highlighted nooks and crannies that tell us how the Government view trade with obnoxious regimes. I hope that it will report during the Session. The Government should give an assurance that if the inquiry makes recommendations for changes in the law, they will implement them. There should be no ifs, buts or maybe this or that. It is clear that the export regime needs to be overhauled, and the sooner the better. Transparency must be introduced. That which the Government tell Parliament is the United Kingdom's policy must be seen to be implemented. It must not be subverted by Ministers or anyone else.
There must be transparency and accountability in the approach of the Department of Trade and Industry to the convention. As things stand, little information would be in the public domain on what the DTI was doing to ensure compliance with the convention. The DTI can refuse to disclose the nature of its activities, on the ground that that would jeopardise the commercial confidentiality of the companies providing information. The international co-ordinating body, the Organisation for the Prohibition of Chemical Weapons at The Hague, cannot make public any information provided to it by the DTI as a national authority. That must be changed, and I shall say a bit more about it in a minute.
Transparency is also needed in the activities of Porton Down, which has been referred to today. I have expressed my outrage at some of the activities there in the past. That is not to say, however, that some of them do not deserve support; I would never want to throw the baby out with the bath water. Porton Down's expertise in physical protection, such as gas masks and suits, is unparalleled, as are the capabilities of its analytical laboratories. My distaste relates primarily to medical counter-measures that require animal tests, especially when many of them could be carried out using alternatives to animals. Truly defensive work could easily be distorted into a potentially offensive capability. Other countries may take the same road using that excuse. I would like to see a tightening of procedures against that get-out.
The Government should consider giving an idea of the quantity of any chemical that is produced at Porton Down, even bearing in mind the 1 tonne limit to which the Minister referred. Under the convention, a certain level of transparency would be required in any case. After all, would we be willing to ratify a treaty that allowed the Iraqis to hide Salman Pak, their Porton Down, behind closed doors? The United Nations special commission on Iraq's weapons of mass destruction has complained to the Foreign and Commonwealth Office about British companies supplying the Salman Pak and Ad Dwar plants in Iraq. In their Scott mire, the Government just want to forget about it, but at its kindest the United Kingdom's role could be described as ambiguous on supporting Iraq's chemical weapons capability.
It is valuable to look at the Bill in a slightly wider context. It will almost certainly be the model for this country's implementation of any verification regime agreed for the biological weapons convention, which, although agreed more than 20 years ago, currently has no verification arrangements. Despite the other faults—some of which I have mentioned—of its political masters, Britain has been quietly in the forefront on that issue. I welcome that and pay tribute to the Government.
There will be another international meeting on biological weapons next week in Geneva. I hope that when arrangements are finished in the coming years, there will be proper co-ordination between the two verification regimes. I raise that issue now, because it could have implications for the proposed legislation in the relatively near future. There could be some overlap between verification of biological and chemical weapons. It is important to ensure that we do not have a situation where verification does not take place because each regime leaves it to the other. That is an important point and it should be taken on board.
Before talking about the specifics for strengthening the Bill, I want to look at an obligation that is not in it, but


which is important. Article X of the convention obliges each party to make arrangements to provide resources in one form or another for future assistance to any party attacked with chemical weapons. Before the Bill completes its passage through the House, may we have an idea of how much we might contribute to a voluntary assistance fund, which, I understand, is to be established? May we have an assurance from the Government that, in any investigation of alleged use of chemical weapons, British expertise will be placed at the disposal of the international organisation without charge, because experience of bureaucracy shows that financial questions impede prompt action? There would be no blank cheque; the costs of such investigations are relatively small, but the benefits of speedy action would be enormous. Nothing less than that can remove the moral stain that remains on this country for its inaction over Halabja.
The Minister referred to "challenge inspections" in the convention. That is important during peacetime. It is important that inspections should take place when allegations are made that chemical weapons are being used during wars between different countries, but they should also happen when it is alleged that a regime has used such weapons against its own people, as in Halabja. Swift investigation is vital. The organisation must be given all the power and authority to do that, should the need arise.

Sir Peter Emery: How does the hon. Gentleman see that applying where the nation had not signed the convention?

Mr. Cohen: That is a genuine point, and it is one of considerable difficulty. We must get all nations to sign the convention at the outset, and the ones that do not must come under continuing pressure. Even when a nation has not signed the convention, the international organisation should put pressure on it for inspections to take place. If that does not occur, the world will draw its own conclusions and should act accordingly.
On the specific aspects of the Bill, I am pleased that the Minister has agreed that an annual report should be presented to Parliament on the activities carried out by this country in implementing the convention. The report should contain the maximum information, taking into account the commercial confidentiality limitation, to which the Government have referred. The Government should not use commercial confidentiality as an excuse to provide very little information to the House. As in Australia, there could be an indication of the activity taking place under the convention, taking into account the restraints of commercial confidentiality.
I believe that there should be an advisory body for the Secretary of State on the implementation of the convention. Its members could be appointed by the Secretary of State, with its expenses paid out of the Consolidated Fund. It would be best to have one or two statutory bodies, but we can consider that matter in Committee.
I am thinking of tabling two specific amendments in Committee. One relates to clause 23, to which my hon. Friends the Members for Ilford, South (Mr. Gapes) and for East Kilbride (Mr. Ingram) on the Front Bench, and the hon. Member for North Devon (Mr. Harvey) have referred. There are flaws in its wording—let alone anything else—as well as in the powers contained in it.

Clause 23(6) should be changed, so that there are positive procedures in the House and in the other place rather than the negative resolution contained in the clause. The regulations will provide the Secretary of State with tremendous powers, which I acknowledge may well be needed. In the main, those powers are likely to be exercised in secret. The accountability to Parliament in the making of those powers should be by positive, not negative, resolution.
I want to add a new paragraph after clause 26(1)(c) to make it an offence knowingly to make a false or misleading statement to any member of the inspection team, the in-country escort or the observer during an inspection. The reason is simple. During an inspection, it is vital that the correct information is presented to the inspection team. Unamended, the Bill would not make giving false or misleading statements an offence. Wilful obstruction covers only physical obstruction. False or deliberately misleading statements should be a punishable offence, otherwise a huge loophole opens up. Showing those subject to inspection a copy of the Act would impress upon them the need to tell the truth and assist inspection to the fullest extent.
The last time that we had legislation to ratify an arms control measure—the conventional forces in Europe treaty—there was a similar gap. I raised the issue then, but pressure of time prevented the legislation from being amended. I hope that if I were to move such an amendment later, it would be included this time.
The Bill, which ratifies an important treaty, is late. Sadly, the Government have not shown that they recognise its significance. However, it will make the world a much safer place and it is welcome. I wish the Bill a speedy passage.

Mr. Mike Gapes: I warmly welcome the Bill. I endorse the remarks of the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) who, like me, is a member of the Select Committee on Foreign Affairs, which called early last year for the speedy implementation of legislation in the previous parliamentary Session.

Mr. Jopling: The hon. Gentleman would wish to be accurate: the Select Committee's report was published this March.

Mr. Gapes: I thank the right hon. Gentleman. I meant the last parliamentary year; we are now in the new parliamentary year.
I was so concerned about the matter that I tabled an early-day motion, which received wide support from all parties, and I successfully secured an Adjournment debate on 24 April, in which I had the opportunity to press the Minister for Science and Technology, the hon. Member for Esher (Mr. Taylor), on why the President of the Board of Trade had not introduced legislation. I concur with the remarks made by hon. Members on both sides of the House about the inordinate delay and why it took three years for the DTI to propose legislation.
We have been told today that legislation is now being introduced rapidly. The problem is that there is not much time between its introduction today and its enactment, which must be in the near future to ensure that Britain is


among the first 65 countries to implement the convention and to ensure that we are in at the very beginning. That will have to be borne in mind in Committee.

Mr. Oppenheim: I remind the hon. Gentleman that the Bill was published in July, so he has had plenty of time to consider it.

Mr. Gapes: The Bill was published in draft form in July. I understand that a revised version was published in the last few weeks. Therefore, the House was not presented with the legislation in July. The Queen's Speech referred to the matter only last week and it is now being pushed through quickly because 42 countries have already implemented the convention and yet more are in the pipeline.
It crossed my mind in July and August that 20 or 30 countries might soon implement the convention, causing the Government to rush legislation through in October in the clear-up period at the end of the last parliamentary year. Fortunately, that did not happen, so we may have a chance properly to scrutinise the Bill.
Many points have already been made but I wish simply to highlight two issues. The first, to which reference has been made, is the problem caused by the DTI being the national authority for the legislation. I have no problem with that in principle, but I am concerned that within the Department staff may not have the necessary expertise to cope with the complexities of properly enforcing the legislation. The danger might be that we have too few people, but with draconian powers, and as a result proper consideration is not given to the needs of the industry or the academic world. I hope that the Minister will assure us that full resources will be given.
One of the benefits of disarmament—the peace dividend—should be that far more resources are given to inspection, verification, implementation and monitoring of disarmament legislation. It is important that that is adequate. For reasons that we understand, the DTI has the lead role in this, but it is important to ensure that resources freed up by the disarmament process are used for verification and implementation of disarmament agreements. We should not skimp on that. It is important that proper resources are given for the full implementation of the treaty in Britain.
Associated with that is a second problem— transparency. Reference has already been made to an advisory board. It would help those in the DTI who must deal with the matter if there were an advisory board of experts, academics, people from industry, people who had some knowledge and perhaps retired military people as well—people who could consider some of the wider aspects. The board should be put on a statutory basis so that it could produce information and reports that could be more widely considered if necessary.
Linked to that is a matter to which reference has already been made. I welcome the Minister's statement on the publication of an annual report. In the interests of trust and wider confidence, however, it is essential that we do something similar to that done in Australia, where the first annual report of the director of safeguards and the director of the chemical weapons convention office has already been published and tabled for debate by the two Houses of the Australian Parliament. I cannot see any problem

in Britain doing the same and I hope that, to that end, amendments will be tabled in Committee so that the Bill can be amended before its Third Reading.
The right hon. Member for Honiton (Sir P. Emery) referred to the need to take action against countries that stay out of the regime. That is important. As the DTI is taking the lead role, that raises the matter of the successor regime to COCOM, the co-ordinating committee of western nations on technology transfers. I hope that some form of international sanctions, in terms of trade, exports and the transfer of technology, will also be considered so that countries that choose not to join the convention will know that there is a penalty in terms of economic co-operation and development.
The issue may be complex because some countries will not join a chemical weapons convention in principle due to their attitude to neighbouring countries and the non-nuclear proliferation treaty, but failure to join would be a terrible mistake. All countries have an obligation to join. The convention has been signed by 159 or 160 countries, but there are 184 or 185 members of the United Nations. It is important that we keep up the pressure on member and non-member states of the United Nations. For example, Taiwan is not recognised as an international state, but nevertheless it is an important international country and it has a significant chemical industry. We should ensure that such countries are part of the process.
The implementation of the convention will be of great importance for the future of the world. The world has struggled for many years to secure what may happen when it is enforced: the achievement of a verified international treaty allowing challenge inspections and enabling international organisations to introduce confidence and co-operation in the future.
We were given a history lesson on chemical weapons. My knowledge does not go back to the ancient Greeks, but I believe that enormous efforts have been made in this century. Reference was made to the Geneva discussions of the 1920s, but efforts were also made in the 1980s. At that time we thought that progress would be made, but the United States adopted a very difficult attitude to what it regarded as intrusion into its chemical industry. We have now come through that: the combination of Mr. Gorbachev's achievements in the ending of the cold war and universal recognition that the threats are real offer us the prospect of securing an international treaty.
I am pleased that the Government have introduced the Bill. I am sure that it will be received positively in all quarters. It is important to get it absolutely right, however, and I therefore hope that the Government will take account of the points made today by hon. Members on both sides of the House when the later stages of the Bill are considered.

Mr. Ingrain: With the leave of the House, Madam Deputy Speaker. I shall not speak for long because the Minister raised many points earlier and I feel that the House will benefit from what he says in reply. This has been an important and informative debate; all who have participated will probably leave the Chamber with more knowledge than they had initially. The same will apply outside the House.
The Minister said that the Royal Society of Chemistry had not provided him with an important briefing document. I have checked with the society, which confirmed that two copies of the document were given to his Department yesterday. I hope that that will be placed on the record, and I am sure that the Minister will correct any omission by his Department. The society should not be criticised.
I do not intend to deal with all the points that have been made, but the Minister asked for suggestions on how the Bill could be improved. We are trying to ensure its fairly speedy passage, but that does not mean that we should ignore the need for amendment. The Minister has been asked specific questions about the way in which the annual report will be presented to Parliament—for instance, will that be statutory? He has also been asked a number of questions about the way in which the regulations will be handled—will they be dealt with by the affirmative or negative resolution procedure?—and about the need for an advisory body, among other related matters. All those issues would require amendments to the Bill.
I am prepared to talk to the Minister with the aim of ensuring that the amendments are suitable, and that the Bill is eventually worded in the best possible way. The Minister said that he had not been contacted by an Opposition spokesman during the lengthy period since the Bill's first appearance, or since Britain signed the convention three years ago; I am now making an offer to him. If he wants co-operation on the amendments necessary to deal with the important points that have been raised today, I shall be happy to co-operate with him.
I congratulate every hon. Member who has spoken: some sound and cogent points have been made. I also thank the Royal Society of Chemistry, which has helped many hon. Members. It is clear that the authoritative document produced by Julian Perry Robinson has struck a chord with many people, and I hope that it will help the Minister to improve the Bill so that it can assist us all in dealing with a critical issue.

Mr. Oppenheim: With the leave of the House, Mr. Deputy Speaker. It is clear that, in general, the Bill enjoys the whole-hearted support of hon. Members on both sides of the House. That was demonstrated by the enlightening and helpful speeches that we have heard.
I also appreciated the spirit of the comments made by the hon. Member for East Kilbride (Mr. Ingram). In the same spirit, I shall not respond in detail to his comments about British manufacturing industry. He paid tribute to the chemical industry for having notched up a large manufacturing surplus; I could name other industries that have been transformed in the past 15 years, but, in deference to the spirit of consensus that is so uncharacteristic of my performances at the Dispatch Box, I shall not do so. Instead, I shall do my best to respond to the serious issues that have been raised.
First, have we been late in presenting the legislation? The convention is extremely complex, and the Department of Trade and Industry has—rightly— consulted widely. We have had to ensure that the convention is implemented effectively and fully; we have also had the conflicting duty of trying to minimise the burdens on business. I think that hon. Members on both 239912 O

sides of the House recognise that necessity, and that we have achieved our aim without imposing any short cuts. My hon. Friend the Member for Salisbury (Mr. Key) commented on that. The convention is complex, and we must translate it into a complex Bill; we consider it better to get the legislation right than to rush it.
The comments of the hon. Member for East Kilbride struck me as a little unfair. On the one hand, he said that we had been slow in presenting the Bill to Parliament, but on the other he said that we were rushing things. In fact, we have taken our time. We began the consultation process a year ago, and about three months ago we issued draft legislation. That has not always happened. I feel that there has been a reasonable amount of time for suggestions to be made. Moreover, I am proud to say that we are in the first group of countries that will implement the convention. The hon. Gentleman may say that we are a bit slow, but other countries have had even more problems than we have in implementing it. I feel that I should at least respond to some of the gratuitous comments that have been flung at my right hon. Friend the Deputy Prime Minister, who is not here to defend himself.

Mr. Dalyell: The Minister speaks of gratuitous comments. It was his mother who, on a famous occasion in May 1982, told me in front of a full House that I was treasonable—but I shall not pursue that.
I acknowledge the need to get the legislation right, but how are industry and others who will be affected to be told about the Bill's provisions? There is a communications problem, is there not?

Mr. Oppenheim: I shall deal with that point, which I consider valid. Let me say in passing that, in my 39 years, I have found that my mother is usually right—although she may have been wrong in the case of the hon. Gentleman.
A number of hon. Members raised an important issue. One of them was my hon. Friend the Member for Salisbury, who indeed taught me economics, but at O-level rather than A-level. It is a minor point, of course. I do not think that I took the examination in the end; I think that I took Latin instead. These are not important issues, however. All that need be said is that I benefited enormously from my hon. Friend's teaching. I passed all my examinations; it is just that I may not have taken that particular subject. But I digress, and I shall risk being out of order if I continue.
Our relationship with Porton Down is enormously important. It is connected with the question of where the DTI takes advice on the whole issue of chemical weapons. The Department tends to take such advice from the widest possible range of advisers, but will rely particularly on Porton Down, the advice of which has already proved invaluable. It is an enormous, almost unique centre of expertise in the United Kingdom's defence against chemical weapons, and we shall draw fully on its abilities. We feel, however, that simply to set up a committee of experts may be limiting. We are open to other points of view, but we believe that we should draw as fully as possible on the widest range of expertise that exists in this country. Porton Down will play a valuable part in that.
The issue of whether new chemicals and newly developed chemical weapons fall within the convention has been raised. That is another area in which Porton Down will be invaluable. The convention and the


legislation operate not merely against specific chemicals but against chemical weapons per se. Any development of new chemical weapons, therefore, will come within the bounds of the convention and the legislation, added to which there is scope, if necessary, to make rapid changes to the convention and the legislation.
The hon. Member for East Kilbride and other hon. Members spoke about export controls. The Bill makes no specific provision for export and import controls but it bans chemical weapons whether people are making them, trading in them or using them, because we intend that the existing licensing system for import and export controls should apply. The departmental responsibility in this area is perfectly clear. The President of the Board of Trade is ultimately responsible for issuing export licences. He has the final decision although, of course, he always consults the Ministry of Defence and the Foreign and Commonwealth Office before making any decisions. That is why there is no specific reference in the legislation to export controls.

Mr. Ingram: I do not want to cause delay but I should like to ask a question about export controls. If the DTI, as the national authority, identified that a chemical was being exported which could be used for weapons, who would have the ultimate authority? Would the judgment be made on the basis of trade by the DTI as the national authority in relation to the convention?

Mr. Oppenheim: First, the DTI would not licence the export of any chemical weapon, and it would also fall within the terms of the legislation that governs the convention because the convention prevents us from trading in chemical weapons. Such export would be illegal on both grounds and a licence would not be issued. In any case, the request would fall within the terms of the convention and one hopes that that would be picked up long before anyone applied for an export licence. It is unlikely that anyone would apply for a licence for chemical weapons when such weapons are illegal. I hope that that satisfies the hon. Gentleman.
The hon. Member for Linlithgow (Mr. Dalyell) mentioned the appeals procedure. The Bill has an appeals procedure as part of the licensing arrangements and it applies to schedule 1 chemicals that do not have to be licensed. I shall come to that matter. We intend to model the appeals procedure on the one that is soon to be introduced under the Deregulation and Contracting Out Act 1994-. I assure hon. Members that the appeals procedure would include a committee consisting of those with sufficient expertise to advise on licensing matters.
The issue of whether there are short cuts on verification was mentioned. I assure the House that the preparatory commission process has not led to any weakening of the convention's verification procedures. United Kingdom experts have worked extremely hard and closely with officials to maintain the integrity of the convention, and our officials will continue to do so.
The hon. Member for East Kilbride and others were concerned about whether clause 23 was unnecessarily draconian. We looked carefully at that possibility and it concerned me when I looked at the proposed legislation. The first problem is that the chemical industry is large, diverse and scattered. Secondly, there is no single list of

firms that might produce or use scheduled chemicals. Thirdly, the convention clearly requires the UK to produce a complete declaration of scheduled chemicals and not just an approximate list. The Department needs to assemble a complete list to fulfil our obligations under the convention. That is why clause 23 is relatively draconian and why, as a last resort, we also need criminal sanctions.
International experience in this area shows that without criminal sanctions there can be a low response. We carefully considered the implications of clause 23 and we are prepared to consider them further, but we think that they are essential. That goes to the issue of regulation, which was raised by my hon. Friend the Member for Salisbury. By instinct we are not regulators and want regulation only when it is absolutely necessary. I entirely agree with my hon. Friend that this area is absolutely black and white in terms of where the Government need to regulate. We are trying to make sure that we regulate properly. Clause 23 is necessary but if hon. Members are worried about it we shall listen to their concerns.
The hon. Member for East Kilbride mentioned the annual report. We want to ensure that the report is as informative as possible within certain constraints, and I think that Opposition Members accept what those constraints must be. First, commercial confidentiality is important, and that is allowed for in the convention. Secondly, national security must be considered and, thirdly, the convention insists that we must not reveal information that has been received specifically for the purposes of fulfilling the convention or about individuals. Therefore, we have to be careful about the information that we do reveal. However, within those bounds we are determined to ensure that the annual report should be as transparent as possible.
I have listened carefully to hon. Members and I think that it is sufficient that I have placed quite clearly on the record the fact that there will be an annual report. We will consider that further if hon. Members remain genuinely unhappy about there not being a statutory requirement. A report that is subject to normal parliamentary scrutiny is the best guarantee that the agency and the report will be effective. Parliament will be the ultimate scrutineer and arbiter.

Mr. Dalyell: One day the Minister will be long forgotten just as one day I suppose that we shall all be long forgotten. I do not doubt his good faith but a statutory annual report is totally different from one that Ministers promise in good faith from the Dispatch Box.

Mr. Oppenheim: I note what the hon. Gentleman says and I accept his concern. I hope that a Minister saying clearly on the record in the House that there will be an annual report is enough. If hon. Members are still dissatisfied, we shall consider their worries on that aspect. My strong view at the moment is that that should be sufficient. I have stated clearly that there will be an annual report; I hope that that is enough.
The hon. Member for Linlithgow raised another important issue when he spoke about what he called the licensing requirements of the short list of quite common chemicals. Some of them, such as carbon, are inert and others, such as sulphur, are relatively inert. I assure the hon. Gentleman that there is no licensing requirement for those chemicals. There are licensing requirements only for the very toxic schedule 1 chemicals. There is a reporting


requirement for relatively inert chemicals and it applies only to companies or organisations that maintain significantly large stocks of the chemicals as set out in the schedule. I hope that that reassures the hon. Gentleman and allays his concerns about research bodies and others needing to apply for licences for ordinary run-of-the-mill chemicals.
My right hon. Friend the Member for Honiton (Sir P. Emery) raised the important issue of what can be done about non-signatories to the convention. We shall continue to press hard that all such states should sign the convention. About three quarters of the world's states have signified that they will join. A relatively small number are still outside the convention and we shall be at the forefront of states pushing to ensure that they sign. The convention proposes constraints on shipping scheduled chemicals to states that are not party to the convention and that element of sanction already exists. Of course, the convention's signatories will be able to consider other measures, as I suspect, in some cases, they will do.
My hon. Friend the Member for Salisbury was worried about the compliance cost assessment. I have already dealt with the question of whether we are over-regulating in that area, but my hon. Friend raised particularly the point that smaller firms may not be affected by declaration and inspection requirements. I can assure him that for schedule 1 toxic chemicals, the size of firm is not a factor, and small firms will not be exempt. The compliance cost assessment applies to the relatively not-so-toxic chemicals below the level of schedule 3 and discrete organic chemicals. We see no reason to apply those measures to smaller companies unnecessarily. The measures are not licensing, but reporting requirements, and the convention does not require those companies or organisations to record what they have got. I hope that that reassures my hon. Friend.
My right hon. Friend the Member for Honiton asked about the various posts involved in the convention and the inspection regime. I can assure my right hon. Friend that we have already passed details of the inspector posts and provisional technical secretariat positions to the relevant qualified UK experts. I understand that several have already been interviewed. Some of the senior posts, such as the executive secretary, are already occupied by UK nationals.
The hon. Member for Leyton (Mr. Cohen) mentioned the complaint made by UNSCOM to the Foreign and Commonwealth Office about British equipment being found at Salman Pak. I understand that UNSCOM asked for details of supplies from the FCO to assist in its investigation. UNSCOM did not make any complaint and all the items it found were dual-use and not licensable. If the hon. Gentleman wishes to pursue the matter further, he should approach the Foreign and Commonwealth Office.
The Member for Leyton also mentioned the important question of article X of the convention, which requires the United Kingdom to give a report to the Organisation for the Prohibition of Chemical Weapons on the assistance that it gives to other states to protect them against chemical weapons. I accept that point, but the Government do not require special legislation to implement action.
I hope that I have answered all the substantive queries to the satisfaction of the House. I appreciate the spirit in which the debate has been conducted. I hope that our differences are relatively small because the legislation is important not just for our future as a nation, but for the future of the world. If the Bill is passed quickly, it will enable the United Kingdom to ensure the effective operation of the convention. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.— [Mr. Knapman.]

Committee tomorrow.

Orders of the Day — CHEMICAL WEAPONS BILL [MONEY]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 50A(l(a),
That, for the purposes of any Act resulting from the Chemical Weapons Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any
expenses of the Secretary of State incurred in consequence of the
Act;
(2) the payment into the Consolidated Fund of sums received by the
Secretary of State in consequence of the Act.—[Mr. Knapman.]

Question agreed to.

Orders of the Day — Hong Kong (Overseas Public Servants) Bill

Order for Second Reading read.

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): I beg to move, That the Bill be now read a Second time.
The Hong Kong (Overseas Public Servants) Bill is an enabling measure, which will allow the British Government to provide a package of benefits to certain overseas public servants in Hong Kong. My purpose today is to explain the background to the proposal, and to set out the package of benefits which we propose to implement by Order in Council after enactment of the legislation.
In 1954, the Government of the day published a White Paper on the future of the colonial civil service. That White Paper anticipated the process of decolonisation and considered how civil servants recruited from this country to work on pensionable terms in the colonies and other dependent territories would be treated when a colony moved to independence.
The White Paper recognised that overseas territories owed a significant debt to the efficient work of the men and women of the colonial service, and that the British Government had a special obligation towards them as a result of their having been recruited to their posts by the Secretary of State for the Colonies or through the Crown Agents. To give officers confidence about their future, the White Paper set out the conditions that they could expect to be observed upon independence. Those conditions included maintenance of their terms and conditions of service, safeguarding of their pensions, the ability to retire prematurely, and the payment to them of compensation. The White Paper also renamed the colonial service as Her Majesty's Overseas Civil Service, or the HMOCS. Judicial officers form a separate HMOJ, but I shall refer to the whole as the HMOCS.
A further White Paper in 1960 refined the arrangements. In particular, it provided that the British Government should provide financial assistance to the territories concerned to help them keep the services of expatriate officers after independence. The White Paper also provided guidance on how the compensation arrangements should operate, and established a resettlement bureau to help the HMOCS members who retired prematurely to find new employment.
Since 1960, 42 former British dependent territories have become independent. The British Government implemented the arrangements by making Orders in Council for the payment of compensation by the successor Government to members of the HMOCS for the loss of their career prospects and of the Secretary of State's protection. The Government also negotiated public officers agreements which required the successor Government to pay pensions at a fixed sterling exchange rate. In most cases, the British Government reimbursed the cost of compensation in the form of aid, and in due course took over the pensions as an aid measure.
There are some 700 members of the HMOCS in Hong Kong who were recruited on pensionable terms before the Sino-British joint declaration was signed in 1984. Those

officers are the last members of the HMOCS. They have contributed enormously to the success of Hong Kong, and many of them wish to continue in the service of the Hong Kong Special Administrative Region Government after 30 June 1997. Like their predecessors in other territories, the officers are concerned about their future and need to know how they will be treated.
The Government considered the question of arrangements for the Hong Kong HMOCS at the time of negotiation of the joint declaration. To give overseas officers a guarantee that their services would be welcomed by the future Hong Kong Special Administrative Region Government, China and Britain agreed, and the joint declaration makes it clear, that, after 30 June 1997, foreign nationals could continue in the service of the SAR Government on terms and conditions of service no worse than before. The joint declaration also provides that the pensions of all Hong Kong civil servants, which includes members of the HMOCS and their dependants, would continue to be paid by the SAR Government. Those pensions are, and will continue to be, paid in Hong Kong dollars.
Those important and far-sighted treaty provisions give members of the HMOCS in Hong Kong confidence that they can continue to work in the service of Hong Kong up to their normal date of retirement, and that their pensions will be paid. The joint declaration also provides that, after 30 June 1997, the top 20 to 30 posts in the Hong Kong public service should be held by Chinese nationals. Those members of the HMOCS who choose to stay on will not be able to aspire to the senior positions. Indeed, the process of localisation is already in full swing and will extend beyond those posts as a result of the need to build up a pool of local officers with enough experience to occupy the highest levels of government. The process of constitutional change will therefore inevitably limit the career prospects of members of the HMOCS in Hong Kong.
By 1989, the Hong Kong HMOCS was pressing the British Government to give its members the same package of benefits provided to their predecessors in other former dependent territories. Their representative body, the Hong Kong HMOCS Association, argued forcibly that its members were in the same position as their predecessors and that the British Government were honour-bound to treat them in the same way. It was supported by the Overseas Service Pensioners' Association—known as OSPA—which represents the interests of former members of the HMOCS from Hong Kong and elsewhere.
The Hong Kong Government judged that they could not provide a general compensation scheme. Hong Kong has a unified public service and the Hong Kong Legislative Council would not be expected to vote funds for special benefits for an exclusive group of expatriates. The only compensation that Hong Kong is prepared to pay is in respect of those officers who are required to retire for constitutional reasons or who are superseded under the localisation programme. Members of the HMOCS look to the British Government, rather than the Hong Kong Government, to provide them with compensation and pension protection which had been accorded in other territories.
After careful consideration, the British Government accepted publicly the associations' request for an HMOCS package of benefits. In formulating detailed proposals, we considered the arrangements made in the 42 previous


cases as well as the particular circumstances of Hong Kong. The package that I shall outline in a moment reflects those considerations, as well as the outcome of discussions with the two associations, and of course the Government's responsibility to balance the interests of the Hong Kong HMOCS and those of British taxpayers.

Dr. Jeremy Bray: In the interests of the Chinese civil servants and the overseas civil servants, is the Minister aware that a suggestion has been made recently in Hong Kong by Sir S. Y. Chung that a shadow Government should be appointed by China six months before the hand-over date to make shadow laws and to prepare a shadow budget? Does the Minister agree that that would cause great confusion in the civil service and for all those who seek to achieve a smooth hand-over in 1997? Can he confirm that the Government have no reasons to believe that that represents the views of the Chinese Government?

Mr. Hanley: I accept the hon. Gentleman's question. Although Sir S. Y. Chung's proposals appear to have been made in a personal capacity, they are damaging to confidence in Hong Kong. The Governor and the Hong Kong Government are committed to co-operation with the Preparatory Committee and future chief executive to ensure a smooth transition in Hong Kong. There is nothing in the joint declaration or basic law about a provisional Government. I believe that the establishment of such a body would only confuse and unsettle the community and the civil service. That is in the interest of neither Hong Kong nor China.
The Government remain committed to effective administration of Hong Kong until 1 July 1997, and we shall do nothing to undermine the authority of the Legislative Council elected in September. I continue to believe that it should be allowed to serve its full four-year term. I hope that the hon. Gentleman accepts that as a full answer. We should now stick more closely to the terms of the Bill.
Subject to Parliament's agreement, it is proposed that Hong Kong HMOCS members and pensioners should be offered the following package of benefits. First, on premature retirement, the HMOCS members would be allowed to retire before the resumption of sovereignty by China, with immediate payment of pension. To enable the Governor to phase departures, officers would be allowed to retire prematurely between 1 July 1996 and 30 June 1997.
The second part of the package is compensation. The HMOCS members would be paid compensation for loss of the Secretary of State's protection and career prospects, based on their seniority and length of service. The proposed compensation arrangements would be broadly similar to previous HMOCS compensation schemes, except that the actuarial factors used to calculate compensation are somewhat less generous. That is because the provisions in the Sino-British joint declaration offer the Hong Kong HMOCS officers a better chance of a continuing career than their predecessors could have expected.
There will be a cap on compensation of £120,000 at 1992 prices. That year was chosen because that was when we first put forward proposals on an HMOCS package for consultation with the interested associations. The cap was set with reference to caps in previous HMOCS

compensation schemes, uprated in line with United Kingdom inflation. As the HMOCS members in other former British dependent territories were not required to pay tax in Britain on their compensation, the HMOCS members would be paid their compensation gross. The cost of any United Kingdom tax liability would be met directly by the British Government.
The compensation arrangements would be set out in two schemes: compensation scheme A and compensation scheme B. The only significant difference is that compensation scheme B would apply to officials who decided to retire prematurely and compensation scheme A would be for those who continue. The compensation arrangements would cost about £47 million at current prices.
The third part of the compensation scheme is a sterling pension safeguard scheme. The HMOCS pensions will continue to be paid in Hong Kong dollars by the Hong Kong Special Administrative Region Government after 30 June 1997. In line with the policy in the 1954 and 1960 White Papers, and subsequent practice, the British Government intend to provide the Hong Kong HMOCS members with pension protection. Unlike previous cases, the Government have decided not to protect the full sterling value of the Hong Kong HMOCS pensions at the date of change in sovereignty. As the Hong Kong HMOCS members receive salaries which have a greater purchasing power than those of their predecessors and of their British counterparts, the Government propose that their pensions be protected at a level broadly equivalent to the pensions received by officers in similar grades in the British public service. This principle of broad comparability underlies the proposed sterling pension safeguard scheme.

Sir Anthony Durant: I am speaking for the Overseas Service Pensioners Association, which is concerned about the formula with which my hon. Friend is now dealing. It feels that the divider of HK $21 is rather unjustified. It would rather stick to the value of a HK $14.6 exchange rate as at 1 January 1992, which it feels is a more satisfactory approach. I wonder whether my hon. Friend will comment on that.

Mr. James Couchman: rose—

Mr. Hanley: It might be for the convenience of the House if I accept another intervention.

Mr. Couchman: I was about to make much the same point as my hon. Friend the Member for Reading, West (Sir A. Durant). I believe that OSPA suggests that the Hong Kong dollar has never been at an exchange rate worse than HK $16 to the pound. Therefore, it sees the divider of HK $21 as totally illogical and unfair. If the safeguard scheme comes into operation, it will reduce pensioners' income to about 70 per cent. of what it should be under the present terms.

Mr. Tim Renton: rose—

Mr. Hanley: Would my right hon. Friend care to intervene before I deal with those interventions?

Mr. Renton: I want to intervene on the same point. I take a contrary view. The Hong Kong Government and the British Government have worked out a satisfactory compromise. The Hong Kong dollar has been extremely strong, in fact a good deal stronger than sterling, for many


years now. Probably quite a few of us would rather take our pensions in Hong Kong dollars than in sterling, particularly with the prospect of a Labour Government. It is right that the British taxpayer should not be asked to take all the burden. I realise the difficulty of reaching a compromise on this issue, and I think that what is suggested in the Bill provides such a compromise.

Mr. Hanley: I am grateful to my right hon. and hon. Friends for their questions.
When we started considering the proposed scheme in 1991, the Hong Kong dollar exchange rate was HK $13.76 to the pound. To bring average Hong Kong and United Kingdom public servants' pensions into line, we calculated that the exchange rate would have to fall from that level to about HK $21 to the pound. That is why the divider of 21:1 appears in the scheme.
We can calculate a pensioner's protected pension by taking the Hong Kong dollar salary in 1991 for the grade at which he retired and dividing that figure by 21 to give the protected pension in sterling as at 1991. That amount is then uprated in line with UK inflation since 1991 to give the current value of his protected pension. In the scheme, his protected pension is described as his notional pension. If, at any point, the sterling value of his actual pension fell below the value of his notional pension, the Government would make up the shortfall.
So the Hong Kong pensioners will continue to be paid their pension. We are talking about a possibility that the Hong Kong dollar might fall. I should like to think that the Hong Kong dollar will not fall but will continue to be strong. It is the objective not only of Her Majesty's Government but of all people of good will that Hong Kong should continue to flourish and have a strong currency.
If the Hong Kong dollar fell, we would protect those pensioners as soon as it fell below HK $21 to the pound. That would mean that the pensions of those people who at present receive pensions higher than those of equivalent civil servants in the United Kingdom would be on broad parity. That seems to the Government to be a fair balance between the needs of protection for Hong Kong pensioners and for the British taxpayer.

Dr. John Marek: The Hong Kong civil servants were recruited by the British Government. They have an expectation of a certain pension at a certain rate. The Government seem to be saying arbitrarily that in certain circumstances they will reduce the civil servants' pensions by up to 40 per cent. Those of us who may be selected to serve on the Committee that will consider the Bill will wish to go into the matter in some detail. Is there any chance of the Minister publishing a draft Order in Council so that we have some meat on which to chew and we can consider the matter carefully? The Bill is an enabling measure. It is difficult to take exception to any of it. We need to be able to see, certainly in Committee, precisely what the Minister is getting at. If he could help the House in that way, it would go a long way towards what I suspect will be a more or less bipartisan approach to the Bill.

Mr. Hanley: I am grateful to the hon. Gentleman for his careful and thoughtful intervention. I imagine that the Committee proceedings will be held within the next two

weeks, although that is still open to negotiation through the usual channels. I hope to produce for members of the Committee as much information as possible to enable them to reach an informed opinion. I hope that that is helpful to the hon. Gentleman.
I assure the House that the British Government would not incur any significant liability under the sterling pension safeguard scheme unless the Hong Kong dollar fell substantially in value. That is just not likely to happen. Certainly in the foreseeable future, Hong Kong's economic stability and the publicly stated commitment by both the Hong Kong authorities and the Chinese Government to maintaining the linked exchange rate between the Hong Kong dollar and the US dollar will bring greater stability to the Hong Kong dollar. The maximum contingent liability under the scheme, based on the wholly unrealistic proposition that the Hong Kong dollar will be worthless on 1 July 1997, would be £130 million spread over 50 years. That liability would diminish rapidly with the passage of time and could be expected to halve within only eight years. We are talking about a contingency.
The fourth part of the package is resettlement help. The HMOCS officers who retire prematurely would be given financial help in finding re-employment or retraining. This help, some of which would be provided by a consultant or in other ways, would be limited to £2,500 per officer, and subject to an overall cost ceiling of £750,000. The Chinese Government have been informed of the proposal to provide benefits to members of the HMOCS in Hong Kong. They have accepted that this is a matter for the British Government.
An additional element of the package does not depend on the Hong Kong (Overseas Public Servants) Bill for its implementation. It is a proposed amendment to the Regulations on Supplementary Pension for Overseas Service, known as the SPOS. The regulations ensure that increases in all HMOCS pensions, not just those of Hong Kong, keep pace with inflation in Britain. The regulations as applied to Hong Kong are complex and technical, but in essence what we propose is an amendment which would allow the payments under the SPOS to take into account small reductions in the value of the Hong Kong dollar relative to sterling. That would provide some benefit to Hong Kong pensioners, particularly over the long term.
The proposed package has been discussed extensively with the HMOCS Association and OSPA. The HMOCS Association has given its full support to the early passage of the Bill. Despite the misgivings of some former Hong Kong HMOCS members about some elements of the package, the Government believe that it strikes a fair balance between the interests of the HMOCS pensioners and the British taxpayers who will have to fund it.
In conclusion, I urge right hon. and hon. Members, in considering the Hong Kong (Overseas Public Servants) Bill, to bear in mind the contribution that the HMOCS officers have made to Hong Kong, the uncertainty that they face over their future careers, and the honourable record that the British Government have established in providing a reasonable package of benefits to the HMOCS upon the ending of British sovereignty over our dependent territories. It is only right that the HMOCS officers in Hong Kong should receive benefits similar to those provided to their predecessors. I hope that the arguments that I have made will be supported by the House.
I thank the hon. Member for Wrexham (Dr. Marek) for his question. I have just heard that the information that he requested—schemes for Orders in Council—are at this moment being placed in the Libraries of both Houses.

Mr. Derek Fatchett: In the spirit of these post-Nolan times, may I thank the Hong Kong Government for the hospitality that they have shown to me in recent days, during which I was a guest of the Government. I thank them for the timetable that they organised for me. It was my first visit to Hong Kong and it was a most impressive experience. It is difficult for anyone to come away from Hong Kong without having been struck by the nature of its society. It is an interesting society and one which is, for fairly obvious reasons, increasingly politicised. Everyone has a view on the events that are taking place and are likely to take place on the island. It was fascinating to hear the full spectrum of views that came in my direction. I am sure that the Minister has been through a similar experience. One or two people mentioned kindly to me the meetings they had recently had with him.
Two things struck me visually about Hong Kong. The first was the intimate relationship between the economy of Hong Kong and southern China. One can understand that only by seeing the extent to which Hong Kong's manufacture, if I may use that expression, now takes place in southern China. The second was the success of the Hong Kong people and Government in undertaking such a massive infrastructure project as the development of the new airport. The airport, the road scheme and the railway projects are all running virtually on time and in budget. That is a tremendous achievement and one which the Government and those directly involved in the projects can be proud of.
I thoroughly enjoyed my experience of Hong Kong. It taught me a lot about the place and I look forward to further contacts with the people of Hong Kong.
As for the specifics, we welcome the Bill. In particular we welcome the Minister's final comments about providing additional information for the Committee. My hon. Friend the Member for Wrexham (Dr. Marek) has never made such a potent intervention. Within a matter of moments his wish was delivered. One hopes that he will intervene similarly in other debates in future. It may also be helpful to deal with one or two of the points raised by Conservative Members. Of course they may also queue up to serve on the Committee, armed with all the additional information, and be able to make speeches at that stage.
It is right—the Minister made the point—to treat Hong Kong in line with all the other 42 similar experiences. It may be worth while putting on record the fact that last week I had a meeting with Ian Strachan and his colleagues of the Association of Overseas Civil Servants and they were broadly sympathetic to the Bill. They want it to have a quick passage through both Houses. They have some reservations about the sterling guarantee, as the Minister acknowledged in his speech. They said, however—it is very important for all to recognise—that the Bill represents the best available deal on the table. They accept it and want to make progress with it. I say to the civil servants that Labour Members will certainly do nothing to hinder that progress. Indeed, we will do all we can to ensure its speedy passage.
One thing struck me very much last week: the extent to which the civil service in Hong Kong is seen as an important element in civil society. The characteristics of the Hong Kong civil service are ones of which those who have worked in it, either as overseas civil servants or as Hong Kong civil servants, can be justly proud. It is seen as clean, corruption-free and supporting the rule of law.
When we in this House, for obvious reasons on occasions, criticise civil servants, we should look at the Hong Kong experience and the relationship between a clean, corrupt-free civil service and the rule of law and economic development. I hope that those operating in business in Hong Kong take on board the lesson that much of their success and the framework in which their businesses have operated have depended on the type of civil service operating on the island. All of us would wish to express our thanks to those who have worked in the service over the years.
The Minister referred to the fact that about 530 civil servants will benefit from the legislation. Of course the vast majority of civil servants in Hong Kong will not benefit and they will continue to serve the Government both in the pre-1997 arrangements and the post-1997 arrangements. They have also made a very important and successful contribution over the year.
There were anxieties, as the Minister will no doubt acknowledge, over the localisation programme. That is partly dealt with by the Bill. It has to be handled sensitively. There has been some success and it is obviously important that we continue to move forward.
One of the issues that clearly came to light, to which the Minister did not refer but which is important, was the need to maintain the character of the civil service in Hong Kong post-1997. That is important for the economic success of the island and for Chinese sovereignty. The decision on the appointment of the chief executive, which has to be taken by the Chinese Government during 1996, will have a significant impact on civil service morale. I am sure that all hon. Members participating in this debate acknowledge the importance of appointing someone who is seen as upholding the traditions of the civil service and the rule of law and who will give the service a sense of confidence. We will all be watching that appointment—it will be crucial to the post-1997 development of Hong Kong.
The Bill deals with the fears of overseas civil servants. It is right that we should deal with those fears and that we should come up with this legislation and deal with it in the way that we are. The Bill also reminds us—if I may broaden out to some of the Minister's finer points—that we are fewer than 600 days away from the change of sovereignty. The Bill is important because it is but one detailed issue on the path towards the transfer of sovereignty and the way in which we handle it will be significant in future.
When we looked at the work of the joint liaison group, I was delighted to see that progress had been made in a number of areas. We have already talked about the airport and possible developments in relation to container terminal 9. Such advances are significant and help to improve the atmosphere, and resulted partly from the meeting between the Foreign Secretary and his Chinese counterpart. There are difficult issues to be resolved and I think that the Minister will agree that we should place on record in this debate our thanks to all those on the


British side who have played such a significant role in the joint liaison group and have made such a contribution, again as civil servants—not as overseas civil servants in that case, but as Foreign Office staff. They have performed a very important function on behalf of people here.
Although we have dealt with one fear through this Bill, there are other fears beyond its remit which arose time and again during my discussions with business people and politicians in Hong Kong. I should like to mention to the Minister—I do not expect an answer today—a matter which is not totally relevant to the Bill but is part of the changeover—

Mr. Deputy Speaker (Mr. Michael Morris): Order. Interesting as the hon. Gentleman's trip to Hong Kong is, I am afraid that the rules of the House are very clear: we must debate only the Second Reading of the Bill. Allusions to other dimensions are acceptable, but there must certainly be nothing beyond that.

Mr. Fatchett: I was foolish enough to pre-empt you, Mr. Deputy Speaker, which was a mistake on my part. I was saying—I am sure that you will acknowledge the point's validity—that while the Bill deals with one set of fears, others exist in Hong Kong. The individuals whom I was going to mention, and who are relevant because their fears still exist, are the war widows and the ethnic minority groups. I hope that the Minister will acknowledge that the Government still have fears with which they must deal. The right measures have been introduced in the Bill, but I assure him that all the political groups in Hong Kong and the business interests recognise that other fears must also be resolved.
We are dealing only with a specific issue in this debate, but we must deal also with the anxieties and concern in Hong Kong. What impressed me was that against such a background, there is a great deal of robust optimism about the future. The society has very clearly stated values. It believes in the rule of law and has political accountability and an element of democracy. The through train post-1997 is crucial to the long-term economic success of Hong Kong.
My hon. Friend the Member for Livingston (Mr. Cook) summed up the matter in the debate on the Gracious Speech when he said that Britain's involvement in Hong Kong and the role played by the British civil service will be judged not only in terms of what we have done over the past few years but by how we have entrenched and embedded a system for the years post-1997. That is the real criterion on which all our records will be judged.
What is clear is that, as part of the British record in Hong Kong, we have left a civil service that has maintained the rule of law and given to that island something of which we can be justifiably proud. That is why we support the Bill and, through it, we thank those overseas civil servants who have played their part in making Hong Kong the success that it is.

Mr. Tim Renton: May I say what a pleasure it is to be taking part in this short debate and what a pleasure it was to listen to the speech of my right

hon. Friend the Minister, and that of the hon. Member for Leeds, Central (Mr. Fatchett) who is also fairly new to his position in the shadow Foreign Office team.
Speaking as a past Foreign Office Minister and one who had responsibilities for Hong Kong between 1985 and 1987, and who since 1992 has been chairman of the active all-party committee on Hong Kong, I find it a great pleasure to be so much in agreement with both speeches.
Before dealing directly with the Bill, may I be provocative for just one moment? I fully agreed with the comments of the hon. Member for Leeds, Central about the legacy that we will pass on in Hong Kong on 30 June 1997. I think that we can be very proud of that legacy. I would only suggest to the hon. Gentleman that he should act to convince the hon. Member for Rotherham (Mr. MacShane), who is sitting behind him, of that.
In a debate on this subject at the Oxford Union some two weeks ago, in which we both took part, the hon. Member for Rotherham advanced some very extreme ideas. More to the point, he advanced the idea that Britain should be thoroughly ashamed of its position in Hong Kong. That is wrong, and I hope that the hon. Member for Rotherham will come to regret those remarks. I am moving on to the subject, Mr. Deputy Speaker.

Mr. Deputy Speaker: I am grateful to hear that the hon. Gentleman is moving on to the subject because this debate is very specific.

Mr. Renton: I think that the Bill, quite simply, is a good housekeeping measure. The legislation is necessary, and the Government are to be congratulated on the speed with which it has been brought before the House.
My right hon. Friend the Minister of State took us through the basic points of the Bill very thoroughly. All hon. Members will be interested in the Bill's resettlement element and in the help that it provides to the members of the overseas civil service and the overseas judiciary who may decide to retire early. If they decide to retire early, it is important for them to know that they will receive assistance in resettlement. That provision may be a further encouragement to some people to retire early.
The main bone of contention in the Bill—perhaps the only one—is that to which my right hon. Friend referred: the peg at which the safeguard to pensions comes into play. That must be a balancing act, but, given the generosity of the pension arrangements in Hong Kong in recent years, which have been based on a substantially higher rate of inflation than that of the United Kingdom, the principle of comparability must apply. Therefore, the decision to make the peg—the point at which the Government would step in to help—the rate of 21 Hong Kong dollars to the pound is, frankly, not unreasonable.
I am sure that the Bill will not have a long Committee stage. It is an advantage that we have discussed that important issue this afternoon and, as the hon. Member for Leeds, Central said, perhaps, having got that out of the way, there will be time at some stage in the future for us to debate some of the other matters to which he referred: a Bill of Rights; the new Special Administrative Region passport and whether it should be visa free, as I hope it will be; and the point that the hon. Member for Motherwell, South (Dr. Bray) raised about the considerable confusion that any interim legislative assembly or interim governmental body in Hong Kong which came into effect before 30 June 1997 would cause.


I am very pleased that the Governor of Hong Kong has already gone on record as saying that he could not possibly support that idea. In such a debate I hope that we might also be able to consider the position of the new fully elected Legislative Council in Hong Kong. I appreciate, however, that those points are not in order this evening.
I certainly support the Bill and hope that it will reach the statute book very quickly.

Sir Russell Johnston: Pretty well every hon. Member who has spoken thus far has subscribed to the general view that the Bill is non-controversial. Indeed, the Library research paper describes it as
a relatively straightforward piece of legislation aimed at creating similar conditions for Members of HMOCS in Hong Kong as have applied in the past when colonies have passed out of British sovereignty.
Nevertheless, it is a fact, of which I am sure the Minister is aware, that there are some in the Overseas Service Pensioners Association who do not take quite that line and feel that they have not been as fairly treated as has been claimed. It is only appropriate and right that their opinion should be ventilated. We are, after all, talking about a very limited number of people. The essential argument that some of them use is that the proposals laid before the House do not provide safeguards equivalent to those afforded to expatriate pensioners in other former colonies who enjoy 100 per cent. protection of the original purchasing power of the pension awarded to them on retirement.
One such pensioner, Mr. A. Thorne, wrote to my hon. Friend the Member for Cheltenham (Mr. Jones). I should like to read out a couple of paragraphs from his letter to which the Minister might be able to respond in his winding-up speech. I shall not read out the first page as it deals mainly with the divisor, a matter already raised by two Conservative Back Benchers. Mr. Thorne wrote:
HMG claims that the proposed safeguard scheme will protect Hong Kong pensions at a sterling value broadly equivalent to those paid to comparable former UK public servants despite any evidence that they can be fairly equated.
Well, that is an argument, I suppose. Mr. Thorne develops it in the next paragraph when he states:
Apart from the obvious defects in arriving at the divisor, no account has been taken in these comparisons of the differences that result from the fact that, in the absence of a ministerial system, Hong Kong civil servants, at every level, carry a degree of responsibility and public accountability which home based civil servants are shielded from. Accordingly, a simple comparison of Hong Kong salaries with those of officers in equivalent ranks and grades of the home civil service makes no allowance for such extra burdens. It follows that the comparisons which have been made in formulating this pensions safeguard scheme are not on a like with like basis.
I do not necessarily espouse that argument, but it deserves a response. I hope that in due course the Minister will provide one.
I shall read one more sentence on the question of the divisor. The correspondent alleges:
Despite many requests from individual pensioners and OSPA, the officials charged with drawing up the scheme have refused to provide calculations showing how the divisor of 21 has been arrived at.
That could also be dealt with in Committee.
We are approaching the end of the time in which we are responsible for Hong Kong, but it is important for people at every level to remember that many questions still need to be answered and criticisms are still being made. I was delighted when the hon. Member for Leeds, Central (Mr. Fatchett), during his recent visit to Hong Kong, made a commitment with regard to the 6,000 or 7,000 ethnic minority group. I wish that the Government would follow his good example.
I should not like to think that the Government have devised a scheme that treats pensioners and the widows of pensioners from Hong Kong any less favourably than pensioners from the other 42 or so colonies. The trouble with many actuarial measures is that they are often too complicated for simple people like me to understand. It is very important that pensioners clearly understand these measures and regard them as fair.

Mr. Denis MacShane: Like other hon. Members who have spoken in the debate, I whole-heartedly support the Hong Kong (Overseas Public Servants) Bill, which is one of the building blocks that we are now putting in place in the lead-up to 30 June 1997.
Two weeks ago, I had the great pleasure to debate the issue of Hong Kong with the right hon. Member for Mid-Sussex (Mr. Renton) in a rather more crowded house at the Oxford Union. We debated the question of whether the British Government have betrayed the people of Hong Kong. I spoke on behalf of the people of Hong Kong because Martin Lee could not attend the debate, and the right hon. Gentleman spoke for the Government. My side won by a margin of 244 to 36, which showed not the power of my persuasion but the idealism of young people on key democracy and human rights issues.

Mr. Renton: I thank the hon. Gentleman for giving way. I take this opportunity in the post-Nolan era to declare my interest in the subject. I should have said at the beginning of my speech that I recently visited Hong Kong as a guest of the Hong Kong Government. I much appreciated their generosity and I have already declared my trip on the Register of Members' Interests.
The hon. Gentleman took a rather extreme view in the Oxford Union debate. He said that he believed that British passports, or right of abode in this country, should be granted to the 3.5 million Hong Kong people who currently hold British national overseas passports. His view was received sympathetically by the audience at the Oxford Union, so perhaps he would like to confirm tonight whether that is also the policy of the Labour party.

Mr. MacShane: I do not think that we should have a re-run of the Oxford Union debate in this place, although I would be happy to participate. I was most affected by the arguments of young men and women—our future leaders and intellectual elite—who drew attention to the fact that some 250 million people from European Union countries have the right to settle and to work in the United Kingdom. They pointed to the unfairness of denying the same rights to 52 war widows and 7,000 stateless Asians who are neither Chinese nor of British origin.
We are slowly putting the building blocks in place, and I appreciate the measured contributions that we have heard tonight. In introducing the Bill, the Minister stressed its importance as a small, but important,


confidence-building measure. I hope that the right hon. Gentleman, in his wider role as the Minister responsible for Hong Kong, will convey to the Chinese Government the deep concern of hon. Members which is reflected in early-day motion 82—which appears on the Order Paper for the first time today, standing in my name and those of other hon. Members—about the plight of Wei Jingsheng, a Chinese human rights activist who is now on trial for his life. There is some contradiction between the confidence-building measure that we are seeking to establish in law tonight and the decision of Beijing in that case which is likely to undermine confidence in a stable future for Hong Kong.
Labour Members have very few objections to the substance of the Bill. Hon. Members have referred to the plight of the war widows, the stateless ethnic and Asian people, and the status of the current British dependent territories passport holders who will receive national overseas passports after 1 July 1997. Other Hong Kong inhabitants will receive Special Administrative Region passports, and I agree with the right hon. Member for Mid-Sussex that they should be granted visa-free entry into the United Kingdom. I emphasise that point to my hon. Friend the Member for Leeds, Central (Mr. Fatchett).
Representatives of Her Majesty's overseas civil service have approached the Government in an effort to secure the best possible packages. They have considered the early retirement option and they wish to secure the value of their pensions after 1997. I hope that the Hong Kong dollar will remain stable. I hope also that sterling will be a much more stable and durable currency in the future through closer links with the process of European integration—but that is a subject for another debate.
I am concerned that civil servants and other groups in Hong Kong who are covered by the legislation will fall foul of article 23 of the basic law, which prohibits
political organisations or bodies of the region from establishing ties with foreign political organisations or bodies.
Some civil servants—for example, judges who have served in British colonies and dependent territories—will find that, if they continue to live in Hong Kong after 1 July 1997 and seek to form quite normal associations so that their interests may be represented, under that article they will be unable to make representations and establish ties with their colleagues in other parts of the world. That is a fundamental concern about the post-30 June 1997 situation in Hong Kong and it has been raised with me during my many visits to Hong Kong in recent years.
As we introduce other legislation to address specific issues between now and 30 June 1997, we must have some regard to articles in the basic law that may nullify the objectives of those who make representations to hon. Members.

Mr. Mike Gapes: I shall not detain the House for long. It is important that we pass the Hong Kong (Overseas Public Servants) Bill, although it is a relatively insignificant tidying-up measure. We must reassure and restore the confidence of the few hundred people in Hong Kong who will benefit from it.
My hon. Friend the Member for Leeds, Central (Mr. Fatchett) referred to the fact that the legislation will not benefit other civil servants in Hong Kong and, as my hon. Friend the Member for Rotherham (Mr. MacShane) said, all Hong Kong civil servants must wonder about their positions post-1997. The present chief executive of the Hong Kong civil service will be replaced by a new appointee after 1997. The Chinese and Hong Kong press have reported the remarks of a potential candidate for that post, the present Hong Kong Chief Justice, who has said that the Bill of Rights and other very modest measures go too far. It is worrying that already senior figures in the administration, the legal system, the civil service and elsewhere in Hong Kong are beginning to adopt a different way of thinking about matters that the civil service in Hong Kong administered in the past and will continue to deal with in the coming year.
Two years ago, the Foreign Affairs Select Committee dealt with Britain's relations with Hong Kong and China, and its report drew attention to a number of matters that I shall not discuss now as they are outside the scope of the Bill. It made clear its concerns about the need for a human rights commission, which the Government unfortunately rejected.

Mr. Deputy Speaker): Order. The hon. Gentleman has been quite ingenious in continually mentioning the word civil servant and then proceeding to argue about some other aspect. I am quite sure that the usual channels will read the debate and recognise that both sides of the House would like a debate on Hong Kong, but that cannot take place this evening.

Mr. Gapes: I take your advice, Mr. Deputy Speaker, and I shall not pursue that line of argument any further.
It is important that the Government do not consider such tidying-up matters to be the end of the process. Issues involving war widows and people who are effectively stateless, and other matters referred to by the Foreign Affairs Select Committee should be dealt with expeditiously in the next year, so that they can be resolved before 1 July 1997.

Mr. Hanley: With the leave of the House, I shall reply to this excellent Second Reading debate.
I am pleased that the Hong Kong (Overseas Public Servants) Bill received a warm welcome from the House. It is essentially non-political and technical and, as my right hon. Friend the Member for Mid-Sussex (Mr. Renton) said, it is a good housekeeping measure that recognises the British Government's responsibilities to the last serving members of HMOCS.
I am particularly grateful to the hon. Member for Leeds, Central (Mr. Fatchett) for giving the proposals his full support and for the tone of his comments. I am extremely pleased that he is now more familiar with Hong Kong. Hong Kong is rather like a Chinese meal: soon after people leave it, they want to go back for more. I am sure that the hon. Gentleman wants to return to Hong Kong. It is a remarkable place.

Mr. David Faber: This evening.

Mr. Hanley: I am sure that this evening Leeds is more pressing.
I am sure that Hong Kong HMOCS officers and pensioners will appreciate the warm tributes that hon. Members on both sides of the House have paid to their commitment and contribution to Hong Kong over many years.
I was not surprised that the House focused on the detail of the package of benefits rather than the principle of providing Hong Kong HMOCS with a package in the first place. After all, we are not doing anything for Hong Kong HMOCS officers that was not done for their predecessors in many other former territories. I note that no hon. Member questioned whether such benefits should be provided and thus doubted the need for this enabling legislation.
All hon. Members recognise that the Bill is necessary and must be implemented without delay. I am glad, too, that the elements in the package that I outlined earlier, and that hon. Members will have an opportunity to consider in detail later, command more support. Any proposal that offers benefits and involves actual expenditure and contingent liability is bound to attract comment, particularly about the costs involved.
Of course, I recognise that other issues need to be resolved, some through the efforts of the joint liaison group, by negotiations between British and Chinese representatives, and others between the Hong Kong Government and the British Government. Although certain issues need to be resolved over the coming 18 months, it is most important to sustain confidence in Hong Kong—confidence in which I firmly believe—so that Hong Kong can continue, with the greatest degree of autonomy and continuity, its current system that has made it such a success.
May I almost intervene on myself and reply to the hon. Member for Rotherham (Mr. MacShane), who mentioned Wei Jingsheng? My right hon. and learned Friend the Foreign Secretary raised that issue on 3 October with the Vice-Premier and Foreign Minister of China, Qian Qichen. We raise issues of human rights and specific cases of concern whenever we meet.
The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) made one small comment with which I disagree. He said that we refused to provide full calculations of the figures. I can assure him that I provided the chairman of the Overseas Service Pensioners Association with a full description of the methods used to calculate the 21:1 divisor, and my officials have provided numerous lists and tables detailing the Hong Kong and United Kingdom salary and pension comparisons. There are more than 50 pages of detailed calculations, and I am sure that I could provide them to the hon. Gentleman if he would like to work through them before the Standing Committee meets.
I conclude by saying a little more about the sterling pension safeguard scheme. I do not want hon. Members to leave tonight without understanding that it is not a bad deal for those for whom we have great admiration and wish to provide.
The proposed pension safeguard scheme differs from previous schemes and does not
offer Hong Kong HMOCS officers full protection of the sterling value of their pensions at 1997 rates. Hong Kong pensions are currently paid in Hong Kong dollars with no guaranteed conversion rate to sterling, so the British Government will assume a new contingent liability for those pensions.
Let me explain why. There is a solid guarantee in the Sino-British joint declaration that the autonomous authorities of Hong Kong will continue to pay pensions after 30 June 1997. The British Government have full confidence that that provision will be honoured. I should tell the hon. Member for Rotherham that, although article 23 of the basic law sets limits to political organisations in Hong Kong having links with such organisations abroad, I am not clear whether that is relevant to HMOCS as article 27 of the basic law guarantees free speech and freedom of association, including labour organisations.
The Bill, therefore, addresses the assistance that should be provided to HMOCS pensioners over and above the existing arrangements whereby they receive their pensions in Hong Kong dollars with no protection against currency movements and having regard to guarantees in the joint declaration. Some have argued that the British Government should protect the full sterling value of Hong Kong HMOCS pensions, but it would be unfair to expect British taxpayers to provide such support as the salaries, and hence the pensions, of the Hong Kong HMOCS have a greater purchasing power than those received by their predecessors and their counterparts in the British public service. In addition, many former Hong Kong HMOCS officers have enjoyed big pension increases over the years, awarded by the Hong Kong Government. Indeed, they have deserved them, but those increases were based on the relatively high rate of inflation in Hong Kong, which has no relevance to the cost of living for pensioners who have retired to the United Kingdom, for example, thus the purchasing power of Hong Kong pensions has in many cases greatly increased since the officers retired, and the British taxpayer should not be asked to protect those windfall increases.
Claims that in some cases our proposed scheme would protect only about 60 per cent. of the sterling value of those Hong Kong pensions do not represent the full picture. The real test of the scheme is what percentage of the original sterling purchasing power of those pensions would be protected by the scheme. The answer is that, on average, the scheme would protect 80 per cent. of officers' Hong Kong pensions and 100 per cent. of almost all widows' pensions, so we have decided that the scheme should be based on the principle of comparability with the British public service. As I explained, we cannot offer Hong Kong HMOCS officers full pension protection. Equally, it would be wrong to leave them with no protection at all, however unlikely an exchange rate collapse might be. That is why we proposed the safety net.
The principle of comparability with the British public service strikes a just balance between the interests—for which the Government are equally responsible—of HMOCS and the British taxpayer. Two points should be borne in mind. First, the proposed scheme would provide a safety net that does not exist at the moment and, secondly, the chances of any significant liability ever being incurred under the proposed scheme are remote. In practice, the contingent liability is expected to halve after eight years and disappear altogether after 18.
I am grateful for the tone of the thoughtful comments by hon. Members on both sides of the House, showing good will both to the people of Hong Kong and its continued future and to the dedicated civil servants who have helped to make Hong Kong the success that it is and will continue to be.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

Orders of the Day — HONG KONG (OVERSEAS PUBLIC SERVANTS) BILL [MONEY]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 50A(1)(a),
That, for the purposes of any Act resulting from the Hong Kong (Overseas Public Servants) Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by the Secretary of State under or by virtue of the Act.— [Mr. Ottaway.]

Question agreed to.

Orders of the Day — Derwent System Schools

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ottaway.]

Mr. Clive Betts: I want to address the House on the subject of Derwent system schools generally and in Sheffield, and I will refer to three schools in Attercliffe that are experiencing particular difficulties.
The Derwent building system was used in the construction of a number of schools in this country in the 1950s. It has been difficult obtaining from the Department of Education and Employment information on the number of Derwent schools built in this country. Perhaps the Minister has those details. I believe that there are more than 100 such schools throughout the country. The Government's latest estimate, in response to a parliamentary question that I asked three years ago, was that it would cost about £300 million to replace Derwent schools.
Sheffield has eight Derwent schools. Seven are mainstream schools that were inherited from the old Derbyshire council prior to boundary changes, one of which is being dealt with by transferring it from its existing building to a more traditional one at Carter Lodge school, where the secondary school has closed. I thank the Minister for his help in arranging that transfer and the necessary credit approvals to fund it. That leaves Birley Spa primary school, Birley primary school and Birley nursery school in my constituency, and three other schools in the constituency of my hon. Friend the Member for Sheffield, Heeley (Mr. Michie). In case there is a danger of entering into a political debate about who must take responsibility for constructing Derwent system schools, I understand that several are located in Essex. Local authorities of all political complexions and persuasions have been responsible for Derwent system schools in the past.
The schools provided reasonable and adequate accommodation for many years until 1987, when the Health and Safety Executive found severe structural problems. I will go into all the complications, but, in essence, it was found that water from the flat roofs of the schools was running down the walls and rotting the timbers. One problem with the Derwent system is that the roof is held up by the walls alone, so if they start to rot the roof will eventually collapse.
The prognosis was that the life of the buildings could be prolonged provided that structural support work was undertaken. One can see today visible and physical evidence of the props that were installed to support the roofs and walls. Even though that work cost £1 million, it is only an interim, temporary measure and continuing regular inspections and further repair and structure will be required. Derwent system schools have other problems. They have poor energy efficiency, and higher general repair and cleaning costs.
Every so often, the local authority is charged with sending its structural engineers to check the schools, and it then places orders for the necessary work.
One consequence of the situation is a great deal of uncertainty for pupils, parents and staff and a large continuing cost for the local authority. From the


beginning, the authority has tried to reassure parents and staff that there was no immediate safety problem—that the structural support work would deal with the safety aspect. Even then, there is still the problem of not knowing how long the schools can continue to exist—of parents not knowing, when their children start school at the age of five, whether the school will still be there when the children are 11.
In 1987, after the authority had consulted the staff and parents and the buildings had been examined, it was agreed that a phased replacement programme was needed. As the schools were all built by Derbyshire council and are all located in a certain part of Sheffield, it would be impossible to replace them all at one go. South-east Sheffield is the area of highest population growth in the city. There is considerable new building and the area's birth rate, as in other parts of the city, is not falling. The local authority has gone through a rigorous process of removing surplus places from schools throughout the city. I had a slight disagreement with the Minister over the closure of Shirebrook school, which falls within the two-mile radius of Birley Spa school. Shirebrook was closed with the agreement of the Minister on the initial decision of the city council. We now have extra mobiles because the schools in the area are overcrowded and cannot accept any more pupils.
I do not accept that the Derwent system schools can be taken out and not replaced. Birley Spa, which is the first school on the authority's list for replacement, has 450 pupils. Birley Spa primary school has 500 pupils, and about 80 children attend Birley Spa nursery. The school lives of all those children are blighted by the uncertainty of the current situation.
Since 1987, the local authority has tried repeatedly to secure Government agreement on a replacement programme. Last year the Minister was good enough to meet a delegation from the local education authority. The head teacher of Birley Spa school, Mr. Geoff Mawson, came along to persuade the Minister that action was needed. As usual in meetings with the Minister, we got tea and a bit of sympathy but no action or resources. The LEA has £1 million of credit approvals this year for dealing with school building problems in the Sheffield area. The cost of replacing the school in the worst condition, Birley Spa, is estimated at £2 million, so there is no way that the LEA could redirect credit approvals already given to solve that one problem. There are other problems—not least to do with rewiring schools throughout the city.
Our argument is that this is a case of exceptional basic need and that credit approval should be given in that respect, particularly as trie situation has worsened. If the Minister did not see fit to grant a specified credit approval for Birley Spa school when we met him last year, I hope that he will pause to reflect and think again, because further evidence that has come to light is pertinent and ought to influence the Minister's thinking.
The proper regular inspections that have been rigorously undertaken by the local authority have revealed the need for additional safety work. That is not surprising because we knew that the buildings were deteriorating. When external panels were removed from Birley Spa school in the summer to reveal the timber, the amount of rot was found to be so substantial that £100,000 must be spent on that school alone. That expenditure will not cure the problem but will give the school a two-year life. Thereafter, further sums will have to be spent regularly. Engineers and architects in

Sheffield council's design and building services department calculated, assuming that the condition of the buildings does not miraculously improve, that it will cost £1 million to keep Birley Spa open for another 10 years. Clearly, spending £1 million on a building which we know will be incapable of providing a decent framework for a school in years to come is an utter waste of money.
The authority had to decide whether to spend £100,000 to give the school a guaranteed life of two years. It did not know that the work would cost £100,000 until it had been started. It was a case of stripping out the panels and finding the rot. The authority could, alternatively, have tried to do something much more fundamental, but the resources were not available and, even then, the problem would not have been cured permanently.
The authority is making decisions in a vacuum. It does not know where the Government stand. If the Government said that the authority should maintain the building for two years and they would then deal with the problem permanently, we would know what to expect. If the Government said that the authority should maintain the building for five years, agreed to put their officials to work with council officials, agreed a five-year programme and then agreed a programme of phased replacement, we would know what to expect. But we do not know what is happening. All we know is that the Government have decided that the school does not need replacing this year, but we do not know whether they think that it will need replacing next year or the year after. We do not know how much money to spend on the school in the interim to maintain the building. We know that there is no permanent solution—even after spending £100,000.
The cost of the repair work does not come from thin air, but out of the budget allocated for the repair of other schools throughout the city, which means that the other 187 schools in Sheffield will receive less money. That will often mean that a flat roof in another traditionally built school will not be repaired or will be patched up rather than replaced, which will cause it further problems in future. That is a short-term, uneconomical way of tackling problems.
It is not merely the authority that is placed in a difficult financial bind. The problems of wood rot, panels falling apart and the ingress of water cause difficulties inside Birley school, which affects the authority's expenditure— from its own budget—on internal fittings and the school's general appearance. The head of Birley said that in the past four years—before those additional problems—he has had to spend £50,000 from his school budget. As he put it, that money could have been used to provide three extra teachers or additional books and equipment, which the school badly needs. Birley Spa school has the worst problems because it has a two-tier structure, but the other schools are in a similar position.
We cannot simply wait until repair work on the school is completely out of the question, buildings start falling down and, for safety reasons, pupils are taken out and have nowhere else to go. The authority has carried out a detailed analysis of surplus places in the area, and there are no other places for the pupils to go. Additional building work is being carried out in the area, and a number of schools are full and are having to make use of mobile classrooms. Surplus places might exist, but only outside the two-mile radius, and it would be unfair to


make children face the prospect of being bussed around the city, without any planned replacement for the school having been agreed.
We cannot contemplate spending £1 million on a series of temporary running repairs to maintain a structure that has no long-term future. That would be economic madness from anybody's perspective, whether the Government, the city council or the people who pay the bills—the council taxpayers of Sheffield and the taxpayers of the country. We need a replacement programme. What is happening is not merely a matter of cost and economics—it affects children's education. We might have disagreements across the Chamber about whether class sizes affect children's education, but I hope that there will be no disagreement over the fact that substantial building work in schools, as well as general uncertainty, affects children's education.
Birley Spa school draws pupils from an estate which is recognised by the city council as an area of deprivation that is in need of urgent attention and has top priority. The most recent survey showed that 42 per cent. of families in that community were on income support and more than 20 per cent. of them were unemployed. Such deprivation means that education must be taken even more seriously there than elsewhere, although I believe that education should be taken extremely seriously everywhere. The school wants to develop some form of nursery provision to deal with the problems of deprivation.
The issue does not merely involve economics, but the life of a school. Geoff Mawson, the head of Birley Spa primary school, has sent me a letter in which he explains that the repairs this year have cost £100,000. He understands that the money is taken out of the authority's general budget for schools, which means that other schools will also suffer. He explains that £51,000 has been spent out of the school budget and, on top of that, an extra £8,000—double the school's allocated budget for repairs and maintenance—has had to be spent on dealing with the problem in the past few months.
In his letter Mr. Mawson states:
The disruption has been heartbreaking. Since September we have had a rota of 66 children sharing one classroom at a time whilst their rooms were being repaired. This is the third time this has taken place in six years! The youngest children have suffered the longest with repairs still taking place! There was no indoor PE for the first half term. There were fewer school assemblies as displaced classes were housed in the hall. Dinners have been disrupted. The shock of the building being condemned for a second time gave little time to us to plan for this emergency.
The repairs and external painting will only guarantee the school's safety for two years! The school building is already an expensive drain on the LEA and the school's resources. The scaffolding has now gone, but the children have lived through another traumatic period. All this has been at an educational cost.
The only agreement seems to be that we need a new building, but no-one can tell me what will happen when this two year period comes to an end. We are a large Primary school, families want to send their children to this school, but the uncertain future is a case of trying to manage the impossible. The children, parents and staff deserve better than this." 
I agree—they deserve much better. Mr. Mawson continues:
I am writing on their behalf to make you aware of our desperate situation and to ask you through your position as a Member of Parliament to draw this to the attention of the Minister concerned.

I am doing so tonight in the most public way.
I was speaking on the telephone this afternoon to the head of Birley primary school—Birley Spa and Birley are two separate schools, although their names are similar. I asked Mr. Blakey, the head, how things were going. He said, "If you can hear me through the noise, we are knee deep in the middle of building work. We have had three months of disruption out of the school year." Builders are outside the school, stripping the panels while children of five are running around. It is difficult to protect children and educate them at the same time under those conditions.
Mr. Blakey said that it was a difficult process for young children to go through. He said that there were no spare classrooms in the school, which was full, and the dining room was having to be used, which disrupted meals. He said that the school was in a state of chaos and turmoil, and the children's education must be suffering as a result. He said that he hoped that it was the last time that the school had to suffer in that way. There is a nursery next to the school, where children under five have to suffer the same disruption and where their educational provision is similarly affected. It is unacceptable.
I hope that tonight the Minister will give a number of commitments. Perhaps we can even reach some agreement. The position is unacceptable and we cannot allow it to continue; it is affecting our children's education. All the money that we are spending—we can have disagreements about whether it is enough—is clearly not being spent to best effect. The children's work is being disrupted and money is being spent on building work which only temporarily relieves the problem and postpones the school's replacement. That is not good economics.
If the Minister agrees to another meeting will he agree to it being held at the schools in question? Instead of sitting in his office in the Department for Education and Employment, watching the water flow from the fountains in the beautiful atrium which was built at enormous expense, will he come to the schools where water is pouring down the walls, causing the timber to rot and disrupting the educational lives of children? Will he come to the schools to see the problems for himself, meet the parents and staff and listen to what they have had to go through?
I am looking for a commitment of credit approval for the next financial year first to replace Birley Spa school, which all the heads in the area, and the governors, have accepted is in the worst condition of all the schools to which I have referred because it is a two-storey structure. The other schools should be subject to agreed replacement, with Department officials talking to council officials and agreeing on the best way forward. I want to see an end to the disruption of education, the replacement of lousy buildings and an end to uncertainty.
The schools have kept going and they have maintained high standards. I am aware of the great efforts that have been made. The heads have shown extraordinary commitment, as have their staff. Great credit is due to them for the way in which they have coped. They have continued to educate children in extremely difficult circumstances. The schools are excellent but the buildings are appallingly inadequate. Only the Government can implement a policy that will replace the present buildings with decent new buildings in which children can be educated properly. Those new buildings will match the commitment of the staff to provide good education, and their commitment will have even greater results if new school buildings are provided, which the children deserve.

The Parliamentary Under-Secretary of State for Education and Employment (Mr. Robin Squire): The
hon. Member for Sheffield, Attercliffe (Mr. Betts) has raised an important issue. As he said, this is the second occasion on which I have heard his arguments for Birley Spa school and others. Last time, of course, responsibility for capital expenditure came within my remit. This time, my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) is the responsible Minister. I undertake to draw the hon. Gentleman's comments to my hon. Friend at the end of the debate. They will receive her full attention.
The Government are concerned that schools should offer their pupils a good and safe learning environment. The statutory duty to ensure that school buildings are safe lies with school governors and local education authorities. The hon. Gentleman knows that. We share a similar background as former leaders of local authorities. To help governors and LEAs discharge the statutory duty effectively, my Department provides advice to local authorities and school governors to alert them to building defects of potentially national significance. The procedure is intended to act as an early-warning system so that authorities can plan accordingly.
In essence, my Department issues a so-called defects letter to all authorities whenever news of a particular building problem could usefully be broadcast. Usually one authority will spearhead the fault-finding process and let the Department know. The scheme has proved so useful that a pack of defects letters is now included in the "welcome pack" for schools entering the grant-maintained sector. When appropriate, the Department will also commission research into the defect, usually through the Building Research Establishment, and disseminate the findings to local authorities.
As the hon. Gentleman said, it was the Sheffield LEA which informed us that it had identified problems with some 1950s Derwent timber framed schools. They were manufactured by Vic Hallam plc in the 1950s and 1960s. The Derwent system comprises permanent buildings of one or two storeys, mainly based on a timber post and plywood box beam framing construction. The buildings are braced by tongue-and-groove roof boards and framed external wall panels. Later forms of the system used different types of cladding such as brick work and tile hanging, although the same principle of structure remained.
As the hon. Gentleman knows, Sheffield LEA reported to my Department that it had found deterioration in the external walls and in certain internal structural members of Derwent buildings. Other common faults were rotting of the timber columns between window sill and floor level, rotting of timber internal columns between floor level and lower ceiling level at the point at which a change of room height occurred and rotting of external columns over their entire height, when adjacent to rainwater outlets, together with other examples of junctions between plywood beams and timber posts that were exposed to water leaks.
Sheffield alerted us to the problem in 1987. Later that year, the Department issued a defects letter to LEAs informing them that further investigations were being carried out by the authority. The Department stressed the importance of carrying out adequate surveys to determine individual building needs.
The Department commissioned some research into the system and sent a copy of the report to LEAs in March 1988. Principally, the report made recommendations for the investigation of Derwent system buildings, but also emphasised the importance of checking all buildings with a similar construction. The Department invited authorities to advise it of any further cases that they identified. There has been only a limited response. I am advised that we are aware of only between 10 and 15 cases. There are, of course, other timber-framed buildings that have not necessarily been specifically identified as Derwent constructions. We are well aware of the difficulties in Sheffield schools, to which the hon. Gentleman has diligently drawn to our attention in the past.
I have already said that schools must offer a good and safe environment for their pupils. We are committed to improving the condition of school buildings. To that end, substantial capital resources have been provided in recent years to enable local education authorities and school governors to improve their building stock. We estimate that, between 1990–91 and 1993–94, LEAs spent about £2.7 billion on their schools.
Generally, capital sums allocated by my Department are not tied to specific projects. Local authorities are given permission to borrow up to a certain level to fund capital programmes for all their services, including education. This borrowing limit—it is called the basic credit approval—is made up of the sum of the annual capital guidelines for different services that are issued to the authority net of any anticipated receipts.
Ultimately, therefore, it is up to LEAs to decide their own priorities, both between services and projects within services. Nor is the basic credit approval, which is issued by the Department of the Environment, the upper limit on authorities' capital spending. Authorities can invest their own capital receipts as they see fit, and they can use funds from their revenue budgets for capital purposes if they wish. Recent relaxations to local authority capital controls—in particular, a reduction in the rate of set-aside required for debt redemption—will help LEAs to maximise the use to which they can put capital assets.
I acknowledge, however, that in recent years tight public expenditure survey settlements have meant that allocations available for improvement or replacement work have not been as high as some local authorities might have wished. It is worth explaining, therefore, that the criteria for allocating capital resources were agreed with the local authority associations over 10 years ago.
Priority in the allocation of schools' annual capital guidelines is first given to commitments arising from projects started in previous years. That is fairly obvious. After that comes the provision of new school places in areas of population growth, basic need, and exceptional basic need, which is a sub-category of basic need. Exceptional basic need essentially covers cases where a surveyor has condemned teaching places or described them as unsafe or structurally unsound. Exceptional basic need cover is given only where repair is either impracticable or actually more expensive than replacement. Such instances are usually emergency cases, but in the light of the hon. Gentleman's comments I confirm to him sincerely that we shall examine extremely carefully any evidence which he or the LEA may forward


to my Department that may show that in the school or schools that he mentioned the problem comes under the qualifications of exceptional basic need.

Mr. Betts: The Minister has said that exceptional basic need covers a school that cannot be repaired or where repair becomes more expensive than replacement. Does the Minister accept that account should be taken of repairs that are immediately necessary and repairs that will continue to be necessary over a period of, for example, five or 10 years? The cost of new buildings should be weighed against repairing existing structures if repair work will have to be continued for five or 10 years.

Mr. Squire: I cannot deny that there was a strong strain of common sense in what the hon. Gentleman said. I am happy to revisit the priorities that were established—I may well have made that clear to him in a previous responsibility—particularly in the light of the points that he is making. At the present time, I can reiterate only what the priority was. He will appreciate that, because there are invariably more bids than there is funding available, it would require broad agreement across local authorities, and I would be happy to receive that. There may be opportunity for local authorities to pursue that with me or my hon. Friend the Member for Chesham and Amersham.
The other priority category covers the implementation of cost-effective schemes to remove surplus school cases, and the hon. Gentleman is aware of their impact. We also make allowance for liabilities for work at voluntary aided schools and for approved capital work in special education. The remaining resources are then distributed by a formula to contribute towards the cost of all other capital-related work at schools. The latter category may include cases that are not exceptional basic need but where replacement is considered to be the most sensible option. Obviously, local education authorities are free to include Derwent buildings in annual capital bids for exceptional basic need cover if they think that a case meets the definition.
Alternatively, LEAs are free to bid at any time for a supplementary credit approval from the Department's limited capital reserve. There are always many competing bids for the resources and only the most urgent and deserving bids are successful. These can sometimes include cases that are not exceptional basic need but that nevertheless appear urgent. We also give priority to any supplementary credit approval bids, involving private sector investment in line with the principles of the private finance initiative.
Very substantial sums have been made available for capital work in schools—more than £600 million this year. Nevertheless, each year, we have to make tough discussions about what to include in our list of successful projects. The hon. Gentleman has schools with Derwent buildings in his constituency, and he highlighted in particular, but not exclusively, Birley Spa. When we met to discuss this issue last year, I explained that a bid for exceptional basic need could be given only where repair would be more expensive than replacement. Surplus provision in the area was also a factor. The LEA has since applied for funding under a supplementary credit approval, which was not successful in the most recent round because of competing bids against very limited resources.
We have made careful note of the hon. Gentleman's arguments on behalf of those schools. I can repeat only that the crucial factor is the availability of resources in each financial year and, of course, the priority criteria, to which I referred. Exceptional basic need is, as its name implies, an exceptional category, essentially for the replacement of condemned buildings.
As I said at the outset, this is the second occasion on which I have discussed this issue with the hon. Gentleman—in rather grander surroundings than our first meeting. On each occasion, I have been impressed by the sincerity and strength of his arguments, and in particular his commitment to Birley Spa school. I shall take that message back to my hon. Friend the Member for Chesham and Amersham and ask her carefully to consider the points that he has made tonight when making her decisions for capital allocations in future.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes past Eight o 'clock.